Candidate entry, screening, and the political budget cycle
Le Borgne , Eric and Lockwood, Ben (2001) Candidate entry, screening, and the political budget cycle. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.582).
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We investigate whether relevant private information about citizens’ competence in political office can be credibly revealed by their entry and campaign expenditure decisions, as opposed to choice of policy once in office. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing in equilibrium. We apply these results to Rogoff’s (1990) model of the political budget cycle, allowing for candidate entry, as well as elections: as interests are common, low-ability candidates are screened out at the entry stage, and so there is no signaling via fiscal policy (i.e. no “political budget cycle”). In a variant of the Rogoff. model where citizens differ in honesty, rather than ability, interests are conflicting, and so the political budget cycle can persist in equilibrium.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HC Economic History and Conditions
J Political Science > JA Political science (General)
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Political campaigns, Campaign funds, Information asymmetry, Representative government and representation|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||August 2001|
|Number of Pages:||41|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Original version, June 2000; revised August 2001
Austen-Smith, D. (1987), “Interest Groups, Campaign Contributions, and Probabilistic Voting”, Public Choice, 54, 123-39.
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