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Candidate Entry, Screening, and the Political Budget Cycle

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  • Eric Le Borgne
  • Ben Lockwood

Abstract

We investigate whether private information about citizens' competence in political office can be revealed by their entry and campaign expenditure decisions. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing. We apply these results to Rogoff's (1990) political budget cycle model: as interests are common, low-ability candidates are screened out at the entry stage, and so there is no signaling via fiscal policy. In a variant of Rogoff's model where citizens differ in honesty, interests are conflicting, so the political budget cycle can persist.

Suggested Citation

  • Eric Le Borgne & Ben Lockwood, 2002. "Candidate Entry, Screening, and the Political Budget Cycle," IMF Working Papers 02/48, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:02/48
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    References listed on IDEAS

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    Cited by:

    1. Klaas Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(1), pages 29-54, February.
    2. Klaas J. Beniers & Robert Dur, 2004. "Politicians’ Motivation, Political Culture, and Electoral Competition," CESifo Working Paper Series 1228, CESifo Group Munich.
    3. Costas Roumanias, 2005. "Signaling Through Political Campaigns: Elections As A Revelation Mechanism," Economics and Politics, Wiley Blackwell, vol. 17(3), pages 367-392, November.

    More about this item

    Keywords

    Fiscal policy; Public sector; Asymmetric Information; Citizen-Candidate; Representative Democracy; Signaling Games; and Political Budget Cycles; voters; probability; election; voting; elections; Models of Political Processes: Rent-seeking; Legislatures; and Voting Behavior; Positive Analysis of Policy-Making and Implementation; Asymmetric and Private Information; National Budget; Deficit; and Debt: General;

    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
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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