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Are We Better Off If Our Politicians Have More Information?

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Author Info
Johan Lagerlof (WZB -- Social Science Research Center Berlin)

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Abstract

This paper studies a model of public policy with heterogenous citizens/voters and two public goods: one (roads) is chosen directly by an elected policymaker, and the other (pollution) depends stochastically on the amount of roads. Both a one-country and a two-country version of the model are analyzed, the latter displaying externalities across the countries which creates incentives for free riding and strategic delegation. The welfare effects of providing the policymaker with information about the relationship between roads and pollution are investigated, and it is shown that more information hurts some – sometimes even all – citizens. In particular, the absence of an institution for information gathering can serve as a commitment device for a country, helping it avoid the free-riding problem. Implications for the welfare effects of “informational lobbying” are discussed.

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File URL: http://129.3.20.41/eps/pe/papers/0209/0209001.pdf
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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0209001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 23 pages
Date of creation: 17 Sep 2002
Date of revision:
Handle: RePEc:wpa:wuwppe:0209001

Note: Type of Document - ; pages: 23; figures: na
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Web page: http://129.3.20.41

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Related research
Keywords: Public information acquisition; value of information; welfare; interest groups; informational lobbying; strategic delegation;

Other versions of this item:

Find related papers by JEL classification:
D69 - Microeconomics - - Welfare Economics - - - Other
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other

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References listed on IDEAS
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. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June. [Downloadable!] (restricted)
  2. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Persson, Torsten & Tabellini, Guido, 1992. "The Politics of 1992: Fiscal Policy and European Integration," Review of Economic Studies, Blackwell Publishing, vol. 59(4), pages 689-701, October. [Downloadable!] (restricted)
    Other versions:
  4. Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-74, September. [Downloadable!] (restricted)
  5. Gersbach, Hans, 1991. "The value of public information in majority decisions," Economics Letters, Elsevier, vol. 35(3), pages 239-242, March. [Downloadable!] (restricted)
  6. Carrillo, Juan D & Mariotti, Thomas, 2000. "Strategic Ignorance as a Self-Disciplining Device," Review of Economic Studies, Blackwell Publishing, vol. 67(3), pages 529-44, July.
  7. Putnam, Robert D, 1988. "Diplomacy and Domestic Politics: The Logic of Two-Level Games," International Organization, MIT Press, vol. 42(3), pages 427-60, Summer.
  8. Torsten Persson & Guido Tabellini, 2002. "Political Economics: Explaining Economic Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661314, January.
  9. Heidhues, Paul & Lagerlof, Johan, 2003. "Hiding information in electoral competition," Games and Economic Behavior, Elsevier, vol. 42(1), pages 48-74, January. [Downloadable!] (restricted)
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  10. Reed, W Robert, 1989. "Information in Political Markets: A Little Knowledge Can Be a Dangerous Thing," Journal of Law, Economics and Organization, Oxford University Press, vol. 5(2), pages 355-74, Fall.
  11. Cremer, Jacques, 1995. "Arm's Length Relationships," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 275-95, May. [Downloadable!] (restricted)
  12. Potters, Jan & van Winden, Frans, 1992. " Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-92, October.
  13. Sakai, Yasuhiro, 1985. "The value of information in a simple duopoly model," Journal of Economic Theory, Elsevier, vol. 36(1), pages 36-54, June. [Downloadable!] (restricted)
  14. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(03), pages 427-460, June. [Downloadable!]
  15. Nahum D. Melumad & Toshiyuki Shibano, 1991. "Communication in Settings with No. Transfers," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 173-198, Summer. [Downloadable!] (restricted)
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Cited by:
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  1. Catherine C. Eckel & Ragan Petrie, 2008. "Face Value," Experimental Economics Center Working Paper Series 2008-11, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
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