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Rational Ignorance, Elections, and Reform

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  • Prato, Carlo
  • Wolton, Stephane

Abstract

This paper studies how voters' demand for reform affects the probability that economic reforms are adopted and, conditional on being adopted, their quality. We consider a model of electoral competition with rationally inattentive voters in which the success of policy changes is tied to a politician's unobservable competence. We show that when the demand for reform is high, the electoral process becomes over-responsive: Candidates promise reforms despite their inability to carry-out welfare-improving policy changes. As voters must then choose between potentially harmful reforms or no reform, high demand for reform tends to be associated with lower probability of reform and/or lower quality of reform. We explain how our results help organize the mixed evidence regarding the impact of crises on the likelihood of reform.

Suggested Citation

  • Prato, Carlo & Wolton, Stephane, 2013. "Rational Ignorance, Elections, and Reform," MPRA Paper 68638, University Library of Munich, Germany, revised 10 Dec 2015.
    • Handle: RePEc:pra:mprapa:68638
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    References listed on IDEAS

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    3. Brad R. Taylor, 2020. "The psychological foundations of rational ignorance: biased heuristics and decision costs," Constitutional Political Economy, Springer, vol. 31(1), pages 70-88, March.
    4. Guido Merzoni & Federico Trombetta, 2021. "A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency," DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo dis2102, Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS).
    5. Blumenthal, Benjamin, 2021. "Political Agency and Legislative Subsidies with Imperfect Monitoring," SocArXiv ydfbs, Center for Open Science.
    6. Campos, Luciano & Casas, Agustín, 2021. "Rara Avis: Latin American populism in the 21st century," European Journal of Political Economy, Elsevier, vol. 70(C).
    7. François Facchini & Louis Jaeck, 2021. "Populism and the rational choice model: The case of the French National Front," Rationality and Society, , vol. 33(2), pages 196-228, May.
    8. Fabrizio Botti & Marcella Corsi, 2019. "La destra populista in Europa: una prospettiva economica (The populist right in Europe: An economic perspective)," Moneta e Credito, Economia civile, vol. 72(286), pages 133-147.
    9. Leyla D. Karakas & Devashish Mitra, 2021. "Electoral competition in the presence of identity politics," Journal of Theoretical Politics, , vol. 33(2), pages 169-197, April.
    10. Tinghua Yu & Elliott Ash, 2021. "Polarization and Political Selection," BCAM Working Papers 2105, Birkbeck Centre for Applied Macroeconomics.
    11. Sonin, Konstantin & Eilat, Ran & Agranov, Marina, 2020. "A Political Model of Trust," CEPR Discussion Papers 14672, C.E.P.R. Discussion Papers.
    12. Morelli, Massimo & Sasso, Greg, 2020. "Bureaucrats under Populism," CEPR Discussion Papers 14499, C.E.P.R. Discussion Papers.
    13. Giray Gozgor, 2022. "The role of economic uncertainty in the rise of EU populism," Public Choice, Springer, vol. 190(1), pages 229-246, January.
    14. Emilio Ocampo, 2019. "The Economic Analysis of Populism. A Selective Review of the Literature," CEMA Working Papers: Serie Documentos de Trabajo. 694, Universidad del CEMA.

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    More about this item

    Keywords

    Crises ; Reforms ; Rationally Ignorant Voters ; Campaigns;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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