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Herding Among Bureaucrats

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  • Branko Boskovic, David P.Byrne, Arvind Magesan

Abstract

The herding of expert opinions is often rationalized as the outcome of social learning. However,experts are typically individuals with career concerns. As a result, herding can also arise from the fear of opposing consensus opinion and the potential career consequences of being wrong. We empirically test for social learning and career concerns using novel data on bureaucrats' expert opinions over whether to publicly provide health insurance for pharmaceuticals. We and robust evidence that career concerns are an important source of herd behavior in these policy choices. Our findings have implications for the delegation of policy-making to experts.

Suggested Citation

  • Branko Boskovic, David P.Byrne, Arvind Magesan, 2012. "Herding Among Bureaucrats," Department of Economics - Working Papers Series 1158, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:1158
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    References listed on IDEAS

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    More about this item

    Keywords

    D80; H77; I18;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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