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Bureaucratic Advice and Political Governance

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Author Info
Robin Boadway (Department of Economics, Queen\u2019s University)
Motohiro Sato () (Graduate School of International Corporate Strategy, Hitotsubashi University)

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Abstract

Politicians typically do not know what policies are best for achieving their broad objectives, so rely on bureaucrats for advice. Bureaucrats are better informed, so can manipulate outcomes by proposing policies that suit their interests. We capture this conflict of interests using a model of political decision-making that focuses on the interaction between politicians and the bureaucracies that advise them. In the basic model, a representative bureaucrat, knowing the characteristics of a given project, recommends to a representative politician whether to adopt it. If the politician chooses to adopt the project, its characteristics are revealed ex post. On the basis of the revealed outcome, the politician decides whether to discipline the bureaucrat. The bureaucrat anticipates imperfectly the chances of discipline when making an ex ante recommendation. When project characteristics are multi-dimensional, the politician can choose whether to seek advice from one bureaucrat or more than one. We compare outcomes in these centralized and decentralized regimes.

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Paper provided by University of Kentucky, Institute for Federalism and Intergovernmental Relations in its series Working Papers with number 2006-03.

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Length: 39 pages
Date of creation: Apr 2006
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Handle: RePEc:ifr:wpaper:2006-03

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  1. Banks, Jeffrey S., 1993. "Two-sided uncertainty in the monopoly agenda setter model," Journal of Public Economics, Elsevier, vol. 50(3), pages 429-444, March. [Downloadable!] (restricted)
  2. Canice Prendergast, 2003. "The Limits of Bureaucratic Efficiency," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 929-958, October. [Downloadable!] (restricted)
  3. Hao Li & Wing Suen, 2004. "Delegating Decisions to Experts," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S311-S335, February. [Downloadable!] (restricted)
  4. Hao Li & Sherwin Rosen & Wing Suen, 2001. "Conflicts and Common Interests in Committees," American Economic Review, American Economic Association, vol. 91(5), pages 1478-1497, December. [Downloadable!] (restricted)
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  5. Alberto Alesina & Guido Tabellini, 2003. "Bureaucrats or Politicians?," Harvard Institute of Economic Research Working Papers 2009, Harvard - Institute of Economic Research. [Downloadable!]
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  6. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn. [Downloadable!] (restricted)
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  7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November. [Downloadable!] (restricted)
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  1. Hikaru Ogawa & David Wildasin, 2007. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," Working Papers 2007-06, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
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  2. Christos Kotsogiannis & Robert Schwager, 2006. "Fiscal Equalization and Yardstick Competition," Working Papers 2006-15, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
  3. David Wildasin, 2007. "Pre-Emption: Federal Statutory Intervention in State Taxation," Working Papers 2007-05, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
  4. Robin Boadway & Jean-Francois Tremblay, 2005. "A Theory of Vertical Fiscal Imbalance," Working Papers 2006-04, University of Kentucky, Institute for Federalism and Intergovernmental Relations. [Downloadable!]
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