Policy Boards And Policy Smoothing
Partisan politics and random election outcomes generate policy uncertainty and partisan business cycles. To reduce policy uncertainty, society must design the policy-making environment to overcome electoral uncertainty and partisanship. I show that delegating policy to an independent policy board with discretionary powers will produce substantial policy smoothing and lower policy uncertainty relative to a simple model in which elected officials set policy. Board members are chosen in a partisan, noncooperative environment; yet in the benchmark model, policy variability is eliminated, and the cooperative bargaining solution is replicated. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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Volume (Year): 115 (2000)
Issue (Month): 1 (February)
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