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The Perils of Friendly Oversight

Author

Listed:
  • Dino Gerardi
  • Edoardo Grillo
  • Ignacio Monzón

Abstract

In democratic societies, politicians craft reform proposals which are then subject to the scrutiny of external authorities. Politicians want their proposals approved and can work to improve their quality. Authorities have their own agendas: they may be in favor or against the reforms under their scrutiny. We study how the authority’s agenda affects the likelihood that a reform is approved and its quality. We show that an authority in favor of a reform can be detrimental towards its approval. This happens when it is easy to incentivize the politician’s work and the status quo alternative is not too attractive.

Suggested Citation

  • Dino Gerardi & Edoardo Grillo & Ignacio Monzón, 2020. "The Perils of Friendly Oversight," Carlo Alberto Notebooks 630, Collegio Carlo Alberto, revised 2021.
    • Handle: RePEc:cca:wpaper:630
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    References listed on IDEAS

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    Cited by:

    1. Andrea Gallice & Edoardo Grillo, 2022. "Legitimize through Endorsement," Carlo Alberto Notebooks 680 JEL Classification: C, Collegio Carlo Alberto.
    2. Popov, Sergey V, 2022. "Tactical Refereeing and Signaling by Publishing," Cardiff Economics Working Papers E2022/14, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    Keywords

    information transmission; moral hazard; oversight; persuasion;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • 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

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