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Why Do Policy Makers Stick to Inefficient Decisions?

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  • Dur, Robert A J

Abstract

This paper offers an explanation for why policy makers stick to inefficient policy decisions. I argue that repealing a policy is a bad signal to voters about the policy maker's competence if voters do not have complete knowledge about the effects of implemented policies. I derive the optimal policy maker's decision on continuation of a policy, assuming that voters' beliefs about the policy maker's competence are updated according to Bayes' rule. I show that if the policy maker cares sufficiently about reelection, he will never repeal a policy. Copyright 2001 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 107 (2001)
Issue (Month): 3-4 (June)
Pages: 221-34

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Handle: RePEc:kap:pubcho:v:107:y:2001:i:3-4:p:221-34

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Glazer, A. & Grofman, B., 1988. "Why Representatives Are Ideologists Though Voters Are Not," Papers 88-04, California Irvine - School of Social Sciences.
  2. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
  3. Wirl, Franz, 1991. " The Political Economics of Wackersdorf: Why Do Politicians Stick to Their Past Decisions?," Public Choice, Springer, vol. 70(3), pages 343-50, June.
  4. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March.
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Cited by:
  1. FU, Qiang & LI, Ming, 2010. "Policy Making with Reputation Concerns," Cahiers de recherche 09-2010, Centre interuniversitaire de recherche en Ă©conomie quantitative, CIREQ.
  2. Amihai Glazer, 2012. "Handicaps on Timing to Improve Reputation," Working Papers 111210, University of California-Irvine, Department of Economics.
  3. Mitja Cok & Polona Domadenik & Tjasa Redek & Miroslav Verbic, 2009. "Labour market reforms in the context of political power theory: The case of Slovenia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 27(1), pages 57-82.
  4. Klaas Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer, vol. 14(1), pages 29-54, February.
  5. Yoh, Allison & Taylor, Brian D. & Gahbauer, John, 2012. "Does Transit Mean Business? Reconciling academic, organizational, and political perspectives on Reforming Transit Fare Policies," University of California Transportation Center, Working Papers qt6dv295b7, University of California Transportation Center.
  6. Klaas J. Beniers, 2005. "Party Governance and the Selection of Parliamentarians," Tinbergen Institute Discussion Papers 05-080/1, Tinbergen Institute.
  7. Klaas J. Beniers, 2005. "Party Governance and the Selection of Parliamentarians," Tinbergen Institute Discussion Papers 05-080/1, Tinbergen Institute.
  8. Pitlik, Hans & Wirth, Steffen, 2003. "Do crises promote the extent of economic liberalization?: an empirical test," European Journal of Political Economy, Elsevier, vol. 19(3), pages 565-581, September.
  9. Louis Jaeck, 2011. "Information and political failures: to what extent does rational ignorance explain irrational beliefs formation?," Constitutional Political Economy, Springer, vol. 22(3), pages 287-301, September.

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