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Herding Among Bureaucrats

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  • Branko Bo_skovic, David. P. Byrne, Arvind Magesan

Abstract

The herding of expert opinions is often rationalized as the outcome of social learning. However, experts are typically individuals with career concerns. As a result,herding can also arise from the fear of opposing consensus opinion and the potential career consequences of being wrong. We empirically test for social learning and career concerns using novel data on bureaucrats' expert opinions over whether to publicly provide health insurance for pharmaceuticals.We and robust evidence that career concerns are an important source of herd behavior in these policy choices. Our endings have implications for the delegation of policy-making to experts.

Suggested Citation

  • Branko Bo_skovic, David. P. Byrne, Arvind Magesan, 2012. "Herding Among Bureaucrats," Department of Economics - Working Papers Series 1153, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:1153
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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