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Political Uncertainty and Policy Innovation

Author

Listed:
  • Christos Kotsogiannis

    (Department of Economics, University of Exeter)

  • Robert Schwager

    (Zentrum fur Europische Wirtschaftsforschung Mannheim)

Abstract

Conventional wisdom has it that outside sources of information enhance the capability of political institutions to separate selfish from benevolent incumbents. This paper investigates, in the presence of innovative public policies whose outcomes are uncertain, the role of outside information and shows that it is more involved than typically thought. While it is true that enhanced information helps in separating politicians, it also creates an externality that reduces the incentives to experiment with innovative public policies.

Suggested Citation

  • Christos Kotsogiannis & Robert Schwager, 2001. "Political Uncertainty and Policy Innovation," Discussion Papers 0111, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:0111
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    File URL: http://people.exeter.ac.uk/cc371/RePEc/dpapers/DP0111.pdf
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    References listed on IDEAS

    as
    1. Cantillon, Estelle, 2008. "The effect of bidders' asymmetries on expected revenue in auctions," Games and Economic Behavior, Elsevier, vol. 62(1), pages 1-25, January.
    2. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 413-438.
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    Citations

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    Cited by:

    1. Johannes Rincke, 2005. "Yardstick Competition and Policy Innovation," Public Economics 0511010, EconWPA.
    2. Mário Rubem Do Coutto Bastos & Mário Rubem Do Coutto Bastos, 2016. "Yardstick Competition E A Disciplina Eleitoral No Programa Bolsa Família," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 070, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Melle Marco C., 2015. "Begünstigungen und Schranken in der europäischen Unternehmensbesteuerung – eine evolutorisch-ökonomische Sicht / Preferential treatments and barriers in the European company taxation – an evolutionary," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 115-146, January.
    4. Puhani, Patrick A., 2003. "A Test of the 'Krugman Hypothesis' for the United States, Britain, and Western Germany," ZEW Discussion Papers 03-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2016. "Fiscal Federalism, Decentralization, And Economic Growth: A Meta-Analysis," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1445-1463, July.
    6. Martin Gregor & Peter Tuchyňa, 2007. "Centralization Trade-off with Non-Uniform Taxation," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 1(3), pages 223-253, November.
    7. Lars P. Feld & Horst Zimmermann & Thomas Döring, 2003. "Föderalismus, Dezentralität und Wirtschaftswachstum," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 72(3), pages 361-377.
    8. Christos Kotsogiannis & Robert Schwager, 2005. "On the Incentives to Experiment in Federations," Discussion Papers 0507, Exeter University, Department of Economics.
    9. Kotsogiannis, Christos & Schwager, Robert, 2006. "On the incentives to experiment in federations," Journal of Urban Economics, Elsevier, pages 484-497.
    10. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2014. "Fiscal Federalism, Decentralization and Economic Growth: Survey and Meta-Analysis," CESifo Working Paper Series 4985, CESifo Group Munich.
    11. Jean-Robert Tyran & Rupert Sausgruber, 2005. "The diffusion of policy innovations -an experimental investigation," Journal of Evolutionary Economics, Springer, vol. 15(4), pages 423-442, October.
    12. Michael Keen & Christos Kotsogiannis, 2003. "Leviathan and Capital Tax Competition in Federations," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 177-199, April.
    13. Hans-Günter Krüsselberg, 2005. "Milton Friedman und der Wissenschaftliche Beirat für Familienfragen Elternkompetenz und Anteilscheine am Schulbudget – Gedanken über Reformpotenziale," Marburg Working Papers on Economics 200506, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    Keywords

    Policy uncertainty; Political uncertainty; Fiscal federalism; Policy innovation; Experimentation.;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H1 - Public Economics - - Structure and Scope of Government

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