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The dilemma of government responsiveness

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  • Dani Rodrik
  • Richard Zeckhauser

Abstract

The expectation that the government will respond to future circumstances, say bailing out a dictator to avoid a bloodbath, or raising taxes on immovable capital investments, often hinders the establishment of appropriate incentives for efficient behavior. The government's dilemma, simply, is that it may be unable to commit future governments not to be responsive. Contracts and constitutional provisions are mechanisms to limit responsiveness. So too are arrangements that increase the cost of being responsive, or build reputations for adhering to certain patterns of behavior. A promising strategy for being responsive is to base government actions on variables not under the control of individuals, such as unalterable characteristics or aggregate outcomes. These are at best palliative measures: Informed policy making must recognize the tension between providing appropriate incentives and permitting government to be responsive.

Suggested Citation

  • Dani Rodrik & Richard Zeckhauser, 1987. "The dilemma of government responsiveness," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 7(4), pages 601-620.
  • Handle: RePEc:wly:jpamgt:v:7:y:1987:i:4:p:601-620
    DOI: 10.2307/3323483
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    Cited by:

    1. Carolyn Kousky & Erzo Luttmer & Richard Zeckhauser, 2006. "Private investment and government protection," Journal of Risk and Uncertainty, Springer, vol. 33(1), pages 73-100, September.
    2. Richard Zeckhauser & Steve Coate & Stephen Johnson, 1992. "Robin-Hooding Rents: Exploiting the Pecuniary Effects of In-Kind Programs," NBER Working Papers 4125, National Bureau of Economic Research, Inc.

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