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Time-Inconsistent Candidates vs. Time-Inconsistent Voters : Imperfect Policy Commitment in Political Equilibrium

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  • Pani, Marco

    (International Monetary Fund)

  • Perroni, Carlo

    (University of Warwick)

Abstract

This paper examines whether policy commitment mechanisms, when available, will be used by the elected policymaker in a political-economy equilibrium. We describe a two period repeated voting model where second-period outcomes depend on commitment choices made by an elected policymaker in the first period, and where elected candidates may choose to deviate from their preferred level of commitment, retaining discretionary control of policy variables, in order to secure a favourable second-period political outcome. The implications of different political tenure systems for the candidates who are elected, the policy targets that are selected, the degree of commitment to their implementation, and the policies that are actually implemented in the model are examined.

Suggested Citation

  • Pani, Marco & Perroni, Carlo, 1999. "Time-Inconsistent Candidates vs. Time-Inconsistent Voters : Imperfect Policy Commitment in Political Equilibrium," The Warwick Economics Research Paper Series (TWERPS) 544, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:544
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/t544.pdf
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    References listed on IDEAS

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    1. Timothy Besley & Stephen Coate, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 85-114.
    2. Cremer, Jacques & Palfrey, Thomas R., 1996. "In or out?: Centralization by majority vote," European Economic Review, Elsevier, vol. 40(1), pages 43-60, January.
    3. Milesi-Ferretti, Gian Maria, 1995. "The Disadvantage of Tying Their Hands: On the Political Economy of Policy Commitments," Economic Journal, Royal Economic Society, vol. 105(433), pages 1381-1402, November.
    4. Martin J. Osborne & Al Slivinski, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 65-96.
    5. Milesi-Ferretti, Gian Maria & Spolaore, Enrico, 1994. "How cynical can an incumbent be? Strategic policy in a model of government spending," Journal of Public Economics, Elsevier, vol. 55(1), pages 121-140, September.
    6. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
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    Cited by:

    1. Matthias Wrede, 2019. "The incumbent’s preference for imperfect commitment," Public Choice, Springer, vol. 180(3), pages 285-300, September.

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    More about this item

    Keywords

    Dynamically Consistent Choices ; Policy Commitment ; Voting;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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