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Democracy and Visibility

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  • Anandi Mani

    ()
    (Department of Economics, Vanderbilt University)

  • Sharun W. Mukand

    ()
    (Tufts University)

Abstract

We examine the role of visibility in influencing government resource allocation across multiple public goods. In an electoral framework, outcomes are defined to be less visible in tasks if it is harder to assess government ability based on observed outcomes. Such a 'visibility effect' distorts resource allocation towards more visible goods. Our model provides an explanation for government neglect in the provision of several essential public goods, despite their considerable benefits. It throws light on the even more puzzling phenomena of voter apathy towards such neglect, and the focus of political competition on issues with small welfare benefits. We show that, even though greater democracy does reduce moral hazard in government effort, there need not be a monotonic improvement in provision of some essential public goods. Good/services with low visibility are more prone to multiple equilibria in resource allocation, such that the outcome depends on voter expectations. We present on evidence on less and more visible public good outcomes in countries at varying levels of democracy.

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File URL: http://www.accessecon.com/pubs/VUECON/vu00-w09.pdf
File Function: Revised version, 2000-12
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0009.

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Date of creation: Apr 2000
Date of revision: Dec 2000
Handle: RePEc:van:wpaper:0009

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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  1. Kenneth Rogoff, 1987. "Equilibrium Political Budget Cycles," NBER Working Papers 2428, National Bureau of Economic Research, Inc.
  2. Barro, Robert J., 1999. "Determinants of Democracy," Scholarly Articles 3451297, Harvard University Department of Economics.
  3. Dewatripont, Mathias & Jewitt, Ian & Tirole, Jean, 1999. "The Economics of Career Concerns, Part II: Application to Missions and Accountability of Government Agencies," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 199-217, January.
  4. David Spector, 2000. "Rational Debate And One-Dimensional Conflict," The Quarterly Journal of Economics, MIT Press, vol. 115(1), pages 181-200, February.
  5. Dani Rodrik, 2000. "Institutions for High-Quality Growth: What They are and How to Acquire Them," NBER Working Papers 7540, National Bureau of Economic Research, Inc.
  6. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
  7. Dewatripont, Mathias & Jewitt, Ian & Tirole, Jean, 1999. "The Economics of Career Concerns, Part I: Comparing Information Structures," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 183-98, January.
  8. Pranab Bardhan & Dilip Mookherjee, 1998. "Expenditure Decentralization and the Delivery of Public Services in Developing Countries," Boston University - Institute for Economic Development 90, Boston University, Institute for Economic Development.
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