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Governmental Failures in Evaluating Programs

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  • Glazer, Amihai
  • Hassin, Refael
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    Abstract

    Consider a government that adopts a program, sees a noisy signal about its success, and decides whether to continue the program. Suppose further that the success of a program is greater if people think it will be continued. This paper considers the optimal decision rule for continuing the program, both when government can and cannot commit. We find that welfare can be higher when information is poor, that government should at times commit to continuing a program it believes had failed, and that a government which fears losing power may acquire either too much or too little information.

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    File URL: http://www.escholarship.org/uc/item/4jd2q25f.pdf;origin=repeccitec
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    Bibliographic Info

    Paper provided by University of California Transportation Center in its series University of California Transportation Center, Working Papers with number qt4jd2q25f.

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    Date of creation: 01 Jan 1994
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    Handle: RePEc:cdl:uctcwp:qt4jd2q25f

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    Related research

    Keywords: Urban Studies and Planning;

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    1. Tabellini, Guido & Alesina, Alberto, 1990. "Voting on the Budget Deficit," American Economic Review, American Economic Association, vol. 80(1), pages 37-49, March.
    2. Robert J. Barro & David B. Gordon, 1983. "A Positive Theory of Monetary Policy in a Natural-Rate Model," NBER Working Papers 0807, National Bureau of Economic Research, Inc.
    3. Glazer, Amihai, 1989. "Politics and the Choice of Durability," American Economic Review, American Economic Association, vol. 79(5), pages 1207-13, December.
    4. Tabellini, Guido & Alesina, Alberto, 1990. "Voting on the Budget Deficit," Scholarly Articles 4553030, Harvard University Department of Economics.
    5. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
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