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Why do Policy Makers stick to Inefficient Decisions?

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Author Info
Robert A.J. Dur () (Erasmus Universiteit Rotterdam)

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Abstract

This paper offers an explanation for why policy makers stick to inefficient policy decisions. I argue that repealing a policy is a bad signal to voters about the policy maker's competence if voters do not have complete knowledge about the effects of implemented policies. I derive the optimal policy maker's decision on continuation of a policy, assuming that voters' beliefs about the policy maker's competence are updated according to Bayes' rule. I show that if the policy maker cares sufficiently about reelection, he will never repeal a policy.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-050/1.

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Date of creation: 01 Jul 1999
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Handle: RePEc:dgr:uvatin:19990050

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Glazer, A. & Grofman, B., 1988. "Why Representatives Are Ideologists Though Voters Are Not," Papers 88-04, California Irvine - School of Social Sciences.
  2. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
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  3. Howitt, Peter & Wintrobe, Ronald, 1995. "The political economy of inaction," Journal of Public Economics, Elsevier, vol. 56(3), pages 329-353, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Klaas J. Beniers, 2005. "Party Governance and the Selection of Parliamentarians," Tinbergen Institute Discussion Papers 05-080/1, Tinbergen Institute. [Downloadable!]
  2. Klaas J. Beniers & Robert A. J. Dur, 2004. "Politicians’ Motivation, Political Culture, and Electoral Competition," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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