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Coalition Governments and Policy Reform with Asymmetric Information

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  • Helm, Carsten
  • Neugart, Michael

Abstract

With ideological parties being better informed about the state of the world than voters, the true motivation of policy proposals is hard to judge for the electorate. However, if reform proposals have to be agreed upon by coalition parties, it may become possible for the government to signal to the voters its private information about the necessity of reforms. Therefore, in coalition governments reforms will be more in line with policy requirements than in single-party governments. This is usually beneficial for the coalition parties as well as for the voter.

Suggested Citation

  • Helm, Carsten & Neugart, Michael, 2009. "Coalition Governments and Policy Reform with Asymmetric Information," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 77399, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:77399
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/77399/
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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