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Seeking information: the role of information providers in the policy decision process

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  • Swank Otto H.

    (Erasmus University Rotterdam, Tinbergen Institute)

Abstract

The consequences of many policies are complicated and difficult to foresee. Those who are capable of providing information to policy makers often have a vested interest in the outcomes. This gives them an incentive to distort information to manipulate policy decisions. In this article we argue that reputation or penalties for lying do not always induce information providers to tell the truth. Rather than relying on interested parties, policy makers can create public agencies to collect information about policy consequences. This has the advantage that policy makers can affect the preferences of the information provider. The drawback is that public agencies must exert efforts to collect information. We argue that policy makers create public agencies whose preferences deviates from their own preferences.

Suggested Citation

  • Swank Otto H., 2000. "Seeking information: the role of information providers in the policy decision process," Public Economics 0004004, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0004004
    Note: Type of Document - WordPerfect; pages: 23
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    References listed on IDEAS

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    1. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
    2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    3. Hopenhayn, Hugo & Lohmann, Susanne, 1996. "Fire-Alarm Signals and the Political Oversight of Regulatory Agencies," Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(1), pages 196-213, April.
    4. Letterie, Wilko & Swank, Otto H, 1997. "Learning and Signalling by Advisor Selection," Public Choice, Springer, vol. 92(3-4), pages 353-367, September.
    5. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    6. Swank, Otto H & Letterie, Wilko & van Dalen, Hendrik P, 1999. "A Theory of Policy Advice," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(3), pages 602-614, October.
    7. Lupia, Arthur & McCubbins, Mathew D, 1994. "Learning from Oversight: Fire Alarms and Police Patrols Reconstructed," Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(1), pages 96-125, April.
    8. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 243-277, Fall.
    9. Breton, Albert & Wintrobe, Ronald, 1975. "The Equilibrium Size of a Budget-maximizing Bureau: A Note on Niskanen's Theory of Bureaucracy," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 195-207, February.
    10. Swank, Otto H., 2000. "Policy advice, secrecy, and reputational concerns," European Journal of Political Economy, Elsevier, vol. 16(2), pages 257-271, June.
    11. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    12. Potters, Jan & van Winden, Frans, 1992. "Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-292, October.
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    More about this item

    Keywords

    Advice; uncertainty; cheap talk; interested parties;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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