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Durable Policy, Political Accountability, and Active Waste

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  • Callander, Steven
  • Raiha, Davin

Abstract

The policy choices of governments are frequently durable. From the building of bridges to the creation of social programs, investments in public infrastructure typically last well beyond a single electoral cycle. In this paper we develop a dynamic model of repeated elections in which policy choices are durable. The behavior that emerges in equilibrium reveals a novel mechanism through which durability interacts with the shorter electoral cycle and distorts the incentives of politicians. We find that a government that is electorally accountable nevertheless underinvests in policy, that it deliberately wastes investment on projects that are never implemented, and that the type of policy it implements is itself Pareto inefficient. The first two distortions match evidence from infrastructure policy in western democracies, and the third identifies a distortion that has heretofore not been explored empirically. Notably, these effects emerge solely due to the interaction of policy durability and political accountability, and not from corruption, poor decision making, or voter myopia.

Suggested Citation

  • Callander, Steven & Raiha, Davin, 2017. "Durable Policy, Political Accountability, and Active Waste," Quarterly Journal of Political Science, now publishers, vol. 12(1), pages 59-97, May.
    • Handle: RePEc:now:jlqjps:100.00016120
    DOI: 10.1561/100.00016120
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    Citations

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    Cited by:

    1. Hülya Eraslan & Kirill S. Evdokimov & Jan Zápal, 2022. "Dynamic Legislative Bargaining," Springer Books, in: Emin Karagözoğlu & Kyle B. Hyndman (ed.), Bargaining, chapter 0, pages 151-175, Springer.
    2. Gersbach, Hans & Jackson, Matthew O. & Muller, Philippe & Tejada, Oriol, 2023. "Electoral competition with costly policy changes: A dynamic perspective," Journal of Economic Theory, Elsevier, vol. 214(C).
    3. Andina-Díaz, Ascensión & Feri, Francesco & Meléndez-Jiménez, Miguel A., 2021. "Institutional flexibility, political alternation, and middle-of-the-road policies," Journal of Public Economics, Elsevier, vol. 204(C).
    4. Zapal, Jan, 2020. "Simple Markovian equilibria in dynamic spatial legislative bargaining," European Journal of Political Economy, Elsevier, vol. 63(C).
    5. Torben K. Mideksa, 2020. "Pricing Pollution," CESifo Working Paper Series 8269, CESifo.
    6. Greg Sasso, 2020. "Delegation and political turnover," Journal of Theoretical Politics, , vol. 32(2), pages 262-288, April.
    7. Foarta, Dana & Ting, Michael M., 2023. "Organizational capacity and project dynamics," Working Papers 339, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    8. Lauriane Gorce (ed.), 2017. "Parameters influencing the choice of durability of a public infrastructure - a literature review," Rapports, Polytechnique Montreal, Groupe de recherche en Gestion et mondialisation de la technologie, number 2017-02, October.
    9. Gersbach, Hans & Muller, Philippe & Tejada, Oriol, 2019. "Costs of change and political polarization," European Journal of Political Economy, Elsevier, vol. 60(C).
    10. William Howell & Stefan Krasa & Mattias Polborn, 2020. "Political Conflict over Time," American Journal of Political Science, John Wiley & Sons, vol. 64(3), pages 554-568, July.

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