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Information, Polarization and Delegation in Democracy

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  • Christian Schultz

Abstract

This paper investigates the merits of different democratic institutions when politics is uni-dimensional, there is uncertainty both about the preferences of the future electorate and the future polarization of political parties, and politicians have better information about the state of the world than voters. Three types of institutions are compared: direct democracy, representative democracy, where politicians are accountable and independent agencies, where they are not. Low uncertainty about the state of the world and the future electorate’s preferences and high expected polarization make direct democracy optimal, while the opposite configuration makes representative democracy optimal. Independent agencies are optimal for intermediate values.

Suggested Citation

  • Christian Schultz, 2003. "Information, Polarization and Delegation in Democracy," CESifo Working Paper Series 1104, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1104
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    File URL: https://www.cesifo-group.de/DocDL/cesifo1_wp1104.pdf
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    References listed on IDEAS

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    1. Christian Schultz, 1996. "Polarization and Inefficient Policies," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 331-344.
    2. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    3. Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1176-1206, September.
    4. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 85-114.
    5. John G. Matsusaka, 1992. "Economics of Direct Legislation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 541-571.
    6. Wilko Letterie & Otto H. Swank, 1998. "Economic Policy, Model Uncertainty and Elections," Economics and Politics, Wiley Blackwell, vol. 10(1), pages 85-103, March.
    7. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    8. Kessler, Anke, 2000. "Representative versus Direct Democracy: The Role of Informational Asymmetries," Bonn Econ Discussion Papers 18/2000, University of Bonn, Bonn Graduate School of Economics (BGSE).
    9. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September.
    10. Harrington, Joseph E, Jr, 1993. "Economic Policy, Economic Performance, and Elections," American Economic Review, American Economic Association, vol. 83(1), pages 27-42, March.
    11. F. Andrew Hanssen, 2004. "Is There a Politically Optimal Level of Judicial Independence?," American Economic Review, American Economic Association, vol. 94(3), pages 712-729, June.
    12. Mailath, George J, 1987. "Incentive Compatibility in Signaling Games with a Continuum of Types," Econometrica, Econometric Society, vol. 55(6), pages 1349-1365, November.
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    Citations

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    Cited by:

    1. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," American Economic Review, American Economic Association, vol. 97(1), pages 169-179, March.
    2. Alberto Alesina & Guido Tabellini, 2004. "Bureaucrats or Politicians?," CESifo Working Paper Series 1130, CESifo Group Munich.
    3. Alesina, Alberto & Tabellini, Guido, 2008. "Bureaucrats or politicians? Part II: Multiple policy tasks," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 426-447, April.
    4. Alberto Alesina & Guido Tabellini, 2003. "Bureaucrats or Politicians?," Working Papers 238, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    5. Guido Merzoni & Federico Trombetta, 2016. "The cost of doing the right thing. A model of populism with rent-seeking politicians and the economic crisis," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis1602, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    6. Alberto Alesina & Guido Tabellini, 2005. "Why Do Politicians Delegate?," NBER Working Papers 11531, National Bureau of Economic Research, Inc.
    7. Erkoc, Taptuk Emre, 2013. "Efficiency of Public Sector Organizations: Perspectives from Theories of Bureaucracy," MPRA Paper 49386, University Library of Munich, Germany.

    More about this item

    Keywords

    accountability; redistribution; constitutional design; voting; information; direct democracy;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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