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Candidate Entry, Screening, and the Political Budget Cycle

  • Eric Le Borgne
  • Ben Lockwood

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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/48.

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Length: 39
Date of creation: 01 Mar 2002
Date of revision:
Handle: RePEc:imf:imfwpa:02/48
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  1. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  2. Leonardo Bartolini & Allan Drazen, 1996. "Capital account liberalization as a signal," Staff Reports 11, Federal Reserve Bank of New York.
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  10. Harrington, Joseph E, Jr, 1993. "Economic Policy, Economic Performance, and Elections," American Economic Review, American Economic Association, vol. 83(1), pages 27-42, March.
  11. David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
  12. Dhillon, Amrita & Lockwood, Ben, 2004. "When are plurality rule voting games dominance-solvable?," Games and Economic Behavior, Elsevier, vol. 46(1), pages 55-75, January.
  13. Cho, In-Koo & Kreps, David M, 1987. "Signaling Games and Stable Equilibria," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 179-221, May.
  14. Milyo, Jeffrey & Groseclose, Timothy, 1999. "The Electoral Effects of Incumbent Wealth," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 699-722, October.
  15. Coate, Stephen & Morris, Stephen, 1995. "On the Form of Transfers in Special Interests," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1210-35, December.
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