A Theory of “Political Will” for Reforms

Do politicians pursue reforms when they know that status-quo policies are inefficient? Prior literature has answered this question as dependent upon reelection incentives to pander to uninformed voters. This paper shows that reform failure can arise from political selection, or the intrinsic characteristics of those who pursue leadership positions and careers in politics, even when voters would like governments to pursue efficient policies. First, the paper shows how incrementally changing the environment in pandering models can yield political selection of “status-quo” types rather than “reformers” as the driving force behind reform failures. In stark contrast to prevailing explanations, reelection incentives in this model push politicians toward reforms. Second, however, even when reelection incentives are introduced, “status-quo” types continue to resist reforms because of the reputation value in political markets of sticking to their preferred (inefficient) policy to signal their type. That is, politicians can choose inefficient policies even at the risk of losing elections because of political career concerns after exiting office. The paper thus formalizes the notion of “political will” as intrinsic motivation and political career concerns of different types of politicians. The relevance of the model is illustrated using available case studies and empirical evidence, with forward-looking implications for international development agencies that advocate ref orms.