AbstractWe study a political system in which voters can optimally pick between political platforms, but cannot screen the quality of individual politicians associated with these platforms. A bad individual achievement can correspond to either incompetence (adverse selection) or corruption (moral hazard). Information could improve, if independent experts assess achievements as compared to commitments, allowing independent judges to investigate possible corruption. We find that while good experts are always beneficial as they increase transparency, the impact of the quality of judges is ambiguous. Above a threshold, with risk-averse social planners, good judges increase the incentive-compatible punishment of politicians, at the cost of possible judiciary mistakes.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9467.
Date of creation: May 2013
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Other versions of this item:
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-28 (All new papers)
- NEP-CDM-2013-09-28 (Collective Decision-Making)
- NEP-CTA-2013-09-28 (Contract Theory & Applications)
- NEP-POL-2013-09-28 (Positive Political Economics)
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