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Why Do Policy Makers Stick to Inefficient Decisions?

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Author Info
Robert A.J. Dur (Tinbergen Institute, Erasmus University 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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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 9906002.

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Length: 21 pages
Date of creation: 18 Jun 1999
Date of revision:
Handle: RePEc:wpa:wuwppe:9906002

Note: Type of Document - ; pages: 21; figures: none.
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Web page: http://129.3.20.41

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Related research
Keywords: reputation; elections; policy reversal;

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation

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. 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.
    Other versions:
  3. Wirl, Franz, 1991. " The Political Economics of Wackersdorf: Why Do Politicians Stick to Their Past Decisions?," Public Choice, Springer, vol. 70(3), pages 343-50, June.
  4. 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 Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer, vol. 14(1), pages 29-54, February. [Downloadable!] (restricted)
    Other versions:
  2. Klaas J. Beniers, 2005. "Party Governance and the Selection of Parliamentarians," Tinbergen Institute Discussion Papers 05-080/1, Tinbergen Institute. [Downloadable!]
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