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Policy Persistence

Author

Listed:
  • Stephen Morris
  • Stephen Coate

Abstract

Policy persistence refers to the tendency of the political process to maintain policies once they have been introduced. This paper develops a theory of policy persistence based on the idea that policies create incentives for beneficiaries to take actions which increase their willingness to pay for these policies in the future. The theory is used to show that policy persistence may lead to political failure, in the sense that policy sequences arising in political equilibrium can be Pareto dominated.
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Suggested Citation

  • Stephen Morris & Stephen Coate, 1999. "Policy Persistence," American Economic Review, American Economic Association, vol. 89(5), pages 1327-1336, December.
  • Handle: RePEc:aea:aecrev:v:89:y:1999:i:5:p:1327-1336
    Note: DOI: 10.1257/aer.89.5.1327
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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