AbstractThis paper develops a theory of policy myopia. Policy myopia arises when rational voters set performance standards that allow elected politicians to distort the portfolio of public investments towards short-term investments. We show that the fact that voters cannot observe immediately how much politicians invested in certain types of public goods is not in itself sufficient to generate policy myopia. Policy myopia, then, arises in societies where electoral control is imperfect or in society where tax revenues cannot be committed in advance. The analysis is motivated by a number of stylized facts about public spending patterns across time and space.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0344.
Date of creation: Oct 2003
Date of revision:
Note: PE, Ma
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Web page: http://www.econ.cam.ac.uk/index.htm
Myopia; public goods; electoral accountability;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-POL-2003-10-05 (Positive Political Economics)
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