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Multitasking, limited liability and political agency

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  • Hatfield, John William
  • Padro i Miquel, Gerard

Abstract

This paper considers a political accountability framework in which the politician exerts unobserved e¤ort in two independent dimensions. Since the worst payo¤ to the politician is removal from o¢ ce, this contracting environment exhibits limited liability. We show that limited liability implies that it is di¢ cult to implement vectors that devote attention to both dimensions. Hence citizens must decide between a high e¤ort allocation to a single task or a low total e¤ort allocation split between the two tasks. Given this, we consider why we do not observe more direct elections of separate ministers, which would allow for better balanced allocations of e¤ort. We …nd that if elections are primarily used as devices to weed out low type politicians, a united executive dominates one with divided accountability. These results give support to the view that elections act chie‡y as selection devices.

Suggested Citation

  • Hatfield, John William & Padro i Miquel, Gerard, 2006. "Multitasking, limited liability and political agency," LSE Research Online Documents on Economics 4824, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:4824
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    References listed on IDEAS

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    Cited by:

    1. Gabriele Gratton & Massimo Morelli, 2022. "Optimal Checks And Balances Under Policy Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(2), pages 549-569, May.
    2. Landa, Dimitri & Le Bihan, Patrick, 2015. "Policy Unbundling and Special Interest Politics," IAST Working Papers 15-32, Institute for Advanced Study in Toulouse (IAST).
    3. Fox, Justin & Van Weelden, Richard, 2015. "Hoping for the best, unprepared for the worst," Journal of Public Economics, Elsevier, vol. 130(C), pages 59-65.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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