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On the Feasibility of Unpopular Policies under Re-Election Concerns

Listed author(s):
  • Y. Stephen Chiu


    (Department of Decision Sciences and Managerial Economics, The Chinese University of Hong Kong)

A common concern about political decision making is that re-election concerns compel incumbent politicians to select policies that, although popular among the electorate, are inferior to available, less popular alternatives. Through studying a series of models, I find that, as long as politicians differ solely in the utility derived from holding office, there always exists an equilibrium where incumbents with strong re-election concerns still make efficient policy choices. However, when other aspects of heterogeneity among politicians are present, incumbents with strong re-election concerns may have the incentive to condition their decisions according to policy popularity. Suppose, for instance, some politicians are dumb in the sense that they are even more ignorant about policy efficacy than the public. To avoid being viewed as dumb, nondumb politicians (especially those with strong reelection concerns) may accept popular but inefficient policies or reject unpopular but efficient policies.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 68 (2002)
Issue (Month): 4 (April)
Pages: 841-858

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Handle: RePEc:sej:ancoec:v:68:4:y:2002:p:841-858
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