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Inefficient policies and incumbency advantage

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  • Hodler, Roland
  • Loertscher, Simon
  • Rohner, Dominic

Abstract

We present a model of (re)elections in which an incumbency advantage arises because the incumbent can manipulate issue salience by choosing inefficient policies in the policy dimension in which he is the stronger candidate. The voters are uncertain about the state of the world and the incumbent's choice of policy. Under complete information they would reelect the incumbent if and only if the state is sufficiently high. Undesirable policy outcomes may be due to either a bad state or the incumbent's choice of inefficient policies. The incumbent uses inefficient policies in intermediate states, whereby he creates uncertainty about the true state in such a way that voters are better off in expectation reelecting him. Hence the equilibrium exhibits an incumbency advantage that stems from asymmetric information and the use of inefficient policies.

Suggested Citation

  • Hodler, Roland & Loertscher, Simon & Rohner, Dominic, 2010. "Inefficient policies and incumbency advantage," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 761-767, October.
  • Handle: RePEc:eee:pubeco:v:94:y:2010:i:9-10:p:761-767
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    Citations

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    Cited by:

    1. Roland Hodler & Simon Loertscher & Dominic Rohner, 2010. "Biased Experts, Costly Lies, and Binary Decisions," Working Papers 10.01, Swiss National Bank, Study Center Gerzensee.
    2. Jo Thori Lind & Dominic Rohner, 2017. "Knowledge is Power: A Theory of Information, Income and Welfare Spending," Economica, London School of Economics and Political Science, vol. 84(336), pages 611-646, October.
    3. repec:eee:poleco:v:51:y:2018:i:c:p:57-68 is not listed on IDEAS
    4. Elena Manzoni & Stefan P. Penczynski, 2012. "Last Minute Policies and the Incumbency Advantage," CESifo Working Paper Series 3773, CESifo Group Munich.
    5. Schelker, Mark, 2011. "Lame Ducks and Divided Government: How Voters Control the Unaccountable," Economics Working Paper Series 1130, University of St. Gallen, School of Economics and Political Science, revised Mar 2012.
    6. Roland Hodler, 2011. "Elections and the strategic use of budget deficits," Public Choice, Springer, vol. 148(1), pages 149-161, July.
    7. repec:sae:jothpo:v:29:y:2017:i:3:p:492-513 is not listed on IDEAS
    8. Margarita Katsimi & Vassilis Sarantides, 2015. "Public investment and reelection prospects in developed countries," Southern Economic Journal, Southern Economic Association, vol. 82(2), pages 471-500, October.
    9. Luciana Moscoso Boedo, 2010. "Who Runs Against the Incumbent? Candidate Entry Decisions," Working papers DTE 494, CIDE, División de Economía.
    10. Hodler, Roland & Loertscher, Simon & Rohner, Dominic, 2014. "Persuasion, binary choice, and the costs of dishonesty," Economics Letters, Elsevier, vol. 124(2), pages 195-198.
    11. Roland Hodler & Simon Loertscher & Dominic Rohner, 2007. "False Alarm? Terror Alerts and Reelection," Department of Economics - Working Papers Series 995, The University of Melbourne.
    12. Hans Gersbach & Markus Müller, 2017. "Higher bars for incumbents and experience," Journal of Theoretical Politics, , vol. 29(3), pages 492-513, July.

    More about this item

    Keywords

    Elections Incumbency advantage Political economics;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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