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The dilemma of government responsiveness

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Author Info

  • Dani Rodrik
  • Richard Zeckhauser

Abstract

The expectation that the government will respond to future circumstances, say bailing out a dictator to avoid a bloodbath, or raising taxes on immovable capital investments, often hinders the establishment of appropriate incentives for efficient behavior. The government's dilemma, simply, is that it may be unable to commit future governments not to be responsive. Contracts and constitutional provisions are mechanisms to limit responsiveness. So too are arrangements that increase the cost of being responsive, or build reputations for adhering to certain patterns of behavior. A promising strategy for being responsive is to base government actions on variables not under the control of individuals, such as unalterable characteristics or aggregate outcomes. These are at best palliative measures: Informed policy making must recognize the tension between providing appropriate incentives and permitting government to be responsive.

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File URL: http://hdl.handle.net/10.2307/3323483
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 7 (1987)
Issue (Month): 4 ()
Pages: 601-620

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Handle: RePEc:wly:jpamgt:v:7:y:1987:i:4:p:601-620

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Web page: http://www3.interscience.wiley.com/journal/34787/home

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Cited by:
  1. Richard Zeckhauser & Steve Coate & Stephen Johnson, 1992. "Robin-Hooding Rents: Exploiting the Pecuniary Effects of In-Kind Programs," NBER Working Papers 4125, National Bureau of Economic Research, Inc.

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