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Are We Better Off If Our Politicians Have More Information?

Author

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  • Johan Lagerlof

    (WZB -- Social Science Research Center Berlin)

Abstract

This paper studies a model of public policy with heterogenous citizens/voters and two public goods: one (roads) is chosen directly by an elected policymaker, and the other (pollution) depends stochastically on the amount of roads. Both a one-country and a two-country version of the model are analyzed, the latter displaying externalities across the countries which creates incentives for free riding and strategic delegation. The welfare effects of providing the policymaker with information about the relationship between roads and pollution are investigated, and it is shown that more information hurts some – sometimes even all – citizens. In particular, the absence of an institution for information gathering can serve as a commitment device for a country, helping it avoid the free-riding problem. Implications for the welfare effects of “informational lobbying” are discussed.

Suggested Citation

  • Johan Lagerlof, 2002. "Are We Better Off If Our Politicians Have More Information?," Public Economics 0209001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0209001
    Note: Type of Document - ; pages: 23; figures: na
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    References listed on IDEAS

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    1. Heidhues, Paul & Lagerlof, Johan, 2003. "Hiding information in electoral competition," Games and Economic Behavior, Elsevier, vol. 42(1), pages 48-74, January.
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    Cited by:

    1. Catherine C. Eckel & Ragan Petrie, 2011. "Face Value," American Economic Review, American Economic Association, vol. 101(4), pages 1497-1513, June.

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    More about this item

    Keywords

    Public information acquisition; value of information; welfare; interest groups; informational lobbying; strategic delegation;
    All these keywords.

    JEL classification:

    • D69 - Microeconomics - - Welfare Economics - - - Other
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other

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