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Coalition governments and policy reform with asymmetric information

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  • Helm, Carsten
  • Neugart, Michael

Abstract

With ideological parties being better informed about the state of the world than voters, the true motivation of policy proposals is hard to judge for the electorate. However, if reform proposals have to be agreed upon by coalition parties, it may become possible for the government to signal to the voters its private information about the necessity of reforms. Therefore, in coalition governments reforms will be more in line with policy requirements than in single-party governments. This is usually beneficial for the coalition parties as well as for the voter.

Suggested Citation

  • Helm, Carsten & Neugart, Michael, 2008. "Coalition governments and policy reform with asymmetric information," Darmstadt Discussion Papers in Economics 192, Darmstadt University of Technology, Department of Law and Economics.
    • Handle: RePEc:zbw:darddp:dar_35489
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    References listed on IDEAS

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    1. Christian Schultz, 1996. "Polarization and Inefficient Policies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(2), pages 331-344.
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    Cited by:

    1. Björn Kauder & Benjamin Larin & Niklas Potrafke, 2014. "Was bringt uns die große Koalition? Perspektiven der Wirtschaftspolitik," ifo Working Paper Series 172, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Kauder Björn & Larin Benjamin & Potrafke Niklas, 2014. "Was bringt uns die große Koalition?," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(1), pages 88-101, February.
    3. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.

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    More about this item

    Keywords

    Asymmetric information; coalition governments; policy reform;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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