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Strategic transparency and electoral pressure

Author

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  • Moretti, Laura
  • Suzuki, Toru

Abstract

This paper investigates how an office-motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re-election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. A more popular challenger can reduce the probability to enhance transparency, while voters can be better off due to a more informative signaling. It is also shown that a higher level of public interest in fiscal issues can increase the probability of enhancing transparency, while voters can be worse off by a less informative signaling.

Suggested Citation

  • Moretti, Laura & Suzuki, Toru, 2012. "Strategic transparency and electoral pressure," CFS Working Paper Series 2012/19, Center for Financial Studies (CFS).
  • Handle: RePEc:zbw:cfswop:201219
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    File URL: https://www.econstor.eu/bitstream/10419/71143/1/732528232.pdf
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    Cited by:

    1. Bryan C. McCannon & Joylynn Pruitt, 2018. "Taking on the boss: Informative contests in prosecutor elections," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(5), pages 657-671, October.

    More about this item

    Keywords

    Fiscal Transparency; Electoral Pressure; Signaling Game; Perfect Sequential Equilibrium;
    All these keywords.

    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

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