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The Paradox of Competence

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  • Gersbach, Hans

Abstract

We examine a model in which the public is unsure about the competence of a politician, and whether they are concerned about the long-term consequences of their decisions (statesman) or about the public’s opinion concerning their competence and preferences (populist). The main finding suggests that the public benefits by disregarding the competence of candidates and by re-electing candidates based on their beliefs about whether a politician is a statesman. This paradox of competence might explain why politicians are so concerned about being perceived as statesmen. We also provide a rationale as to why governing by polls can be detrimental for society. Moreover, our model illustrates in general that delaying irreversible project decisions is a bad signal.

Suggested Citation

  • Gersbach, Hans, 2004. "The Paradox of Competence," CEPR Discussion Papers 4362, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4362
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    Cited by:

    1. Hans Gersbach & Oriana Ponta, 2017. "Unraveling short- and farsightedness in politics," Public Choice, Springer, vol. 170(3), pages 289-321, March.
    2. Thomas Markussen & Jean-Robert Tyran, 2010. "Serving the Public Interest," NRN working papers 2010-21, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    3. Markus Müller, 2007. "Motivation of politicians and long-term policies," Public Choice, Springer, vol. 132(3), pages 273-289, September.

    More about this item

    Keywords

    double-sided asymmetric information; paradox of competence; polls; populists; statesmen;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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