Democracy and Visibility
We examine the role of visibility in influencing government resource allocation across multiple public goods. In an electoral framework, outcomes are defined to be less visible in tasks if it is harder to assess government ability based on observed outcomes. Such a 'visibility effect' distorts resource allocation towards more visible goods. Our model provides an explanation for government neglect in the provision of several essential public goods, despite their considerable benefits. It throws light on the even more puzzling phenomena of voter apathy towards such neglect, and the focus of political competition on issues with small welfare benefits. We show that, even though greater democracy does reduce moral hazard in government effort, there need not be a monotonic improvement in provision of some essential public goods. Good/services with low visibility are more prone to multiple equilibria in resource allocation, such that the outcome depends on voter expectations. We present on evidence on less and more visible public good outcomes in countries at varying levels of democracy.
|Date of creation:||Apr 2000|
|Date of revision:||Dec 2000|
|Contact details of provider:|| Web page: http://www.vanderbilt.edu/econ/wparchive/index.html|
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