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The closer the better? Institutional distance and information blurring in a political agency model

Author

Listed:
  • David Bartolini

    () (OECD)

  • Agnese Sacchi

    () (Sapienza University of Rome (Italy); GEN (Spain))

  • Domenico Scalera

    () (University of Sannio (Italy))

  • Alberto Zazzaro

    () (University of Naples Federico II; CSEF & MoFiR (Italy))

Abstract

Government accountability increases with voters' proximity to policy-makers. Decentralization reforms implemented in many countries in the last twenty years are based on this principle. We present a political agency model that challenges this view and shows that the effects of increasing proximity may depend on the institutional context. In particular, the presence of rent-seeking politicians and heterogeneity in voters' political awareness produce three distinct optimal levels of decentralization. Furthermore, optimal distance depends on the capacity of rent-seeking incumbents to blur information available to voters. When the incumbent reacts to increasing proximity with more blurring activity, the optimal distance increases. Accordingly, less decentralization is preferable.

Suggested Citation

  • David Bartolini & Agnese Sacchi & Domenico Scalera & Alberto Zazzaro, 2018. "The closer the better? Institutional distance and information blurring in a political agency model," Mo.Fi.R. Working Papers 146, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:146
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    More about this item

    Keywords

    government accountability; information; institutional distance; rent-seeking; political awareness;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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