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Rational Ignorance, Elections, and Reform

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  • Prato, Carlo
  • Wolton, Stephane

Abstract

This paper studies how voters' demand for reform affects the probability that economic reforms are adopted and, conditional on being adopted, their quality. We consider a model of electoral competition with rationally inattentive voters in which the success of policy changes is tied to a politician's unobservable competence. We show that when the demand for reform is high, the electoral process becomes over-responsive: Candidates promise reforms despite their inability to carry-out welfare-improving policy changes. As voters must then choose between potentially harmful reforms or no reform, high demand for reform tends to be associated with lower probability of reform and/or lower quality of reform. We explain how our results help organize the mixed evidence regarding the impact of crises on the likelihood of reform.

Suggested Citation

  • Prato, Carlo & Wolton, Stephane, 2013. "Rational Ignorance, Elections, and Reform," MPRA Paper 68638, University Library of Munich, Germany, revised 10 Dec 2015.
  • Handle: RePEc:pra:mprapa:68638
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    Cited by:

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    2. Brad R. Taylor, 2020. "The psychological foundations of rational ignorance: biased heuristics and decision costs," Constitutional Political Economy, Springer, vol. 31(1), pages 70-88, March.
    3. Guido Merzoni & Federico Trombetta, 2021. "A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2102, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    4. Blumenthal, Benjamin, 2021. "Political Agency and Legislative Subsidies with Imperfect Monitoring," SocArXiv ydfbs, Center for Open Science.
    5. Luciano Campos & Agustín Casas, 2020. "Rara Avis: Latin American populism in the 21st century," Working Papers 13, Red Nacional de Investigadores en Economía (RedNIE).
    6. François Facchini & Louis Jaeck, 2021. "Populism and the rational choice model: The case of the French National Front," Rationality and Society, , vol. 33(2), pages 196-228, May.
    7. Fabrizio Botti & Marcella Corsi, 2019. "La destra populista in Europa: una prospettiva economica (The populist right in Europe: An economic perspective)," Moneta e Credito, Economia civile, vol. 72(286), pages 133-147.
    8. Leyla D. Karakas & Devashish Mitra, 2021. "Electoral competition in the presence of identity politics," Journal of Theoretical Politics, , vol. 33(2), pages 169-197, April.
    9. Tinghua Yu & Elliott Ash, 2021. "Polarization and Political Selection," BCAM Working Papers 2105, Birkbeck Centre for Applied Macroeconomics.
    10. Agranov, Marina & Eilat, Ran & Sonin, Konstantin, 2020. "A Political Model of Trust," CEPR Discussion Papers 14672, C.E.P.R. Discussion Papers.
    11. Morelli, Massimo & Sasso, Greg, 2020. "Bureaucrats under Populism," CEPR Discussion Papers 14499, C.E.P.R. Discussion Papers.
    12. Emilio Ocampo, 2019. "The Economic Analysis of Populism. A Selective Review of the Literature," CEMA Working Papers: Serie Documentos de Trabajo. 694, Universidad del CEMA.

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    More about this item

    Keywords

    Crises ; Reforms ; Rationally Ignorant Voters ; Campaigns;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • 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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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