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Coalition Governments and Policy Reform with Asymmetric Information

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  • Helm, Carsten
  • Neugart, Michael

Abstract

With ideological parties being better informed about the state of the world than voters, the true motivation of policy proposals is hard to judge for the electorate. However, if reform proposals have to be agreed upon by coalition parties, it may become possible for the government to signal to the voters its private information about the necessity of reforms. Therefore, in coalition governments reforms will be more in line with policy requirements than in single-party governments. This is usually beneficial for the coalition parties as well as for the voter.

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Paper provided by Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL) in its series Darmstadt Discussion Papers in Economics with number 35489.

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Date of creation: May 2008
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Publication status: Published in Darmstadt Discussion Papers in Economics . 192 (2008-05)
Handle: RePEc:dar:ddpeco:35489

Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/35489/
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Keywords: Asymmetric information; coalition governments; policy reform;

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References

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  1. Cukierman, A., 1997. "When Does it Take A Nixon To Go To China?," Discussion Paper 1997-91, Tilburg University, Center for Economic Research.
  2. : Christian Schultz, . "Polarization and Inefficient Policies," Discussion Papers 93-16, University of Copenhagen. Department of Economics.
  3. Martinelli, Cesar, 2001. " Elections with Privately Informed Parties and Voters," Public Choice, Springer, vol. 108(1-2), pages 147-67, July.
  4. G�rard Roland, 2002. "The Political Economy of Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 29-50, Winter.
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Cited by:
  1. Björn Kauder & Benjamin Larin & Niklas Potrafke, 2014. "Was bringt uns die große Koalition? Perspektiven der Wirtschaftspolitik," Ifo Working Paper Series Ifo Working Paper No. 172, Ifo Institute for Economic Research at the University of Munich.

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