Policy choices by an incumbent: A case with down-up problem, bias believes and retrospective voting

• Type: Technical Report
• Date: 2013

Authors

Carlos Seixas (Author) FEP; António Brandão (Author) FEP; Manuel Luís Costa (Author) FEP

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Associated Institutions

FEP - Faculdade de Economia da Universidade do Porto

Other information

Abstract (EN): The main question addressed in the model regards which type of incentives an elected politician has to choose good or bad policies. In order to answer it, we focus on two inefficiencies, recently considered in the literature: the down-up problem and voters having bias beliefs and voting retrospectively. Moreover, we consider that the politician receives utility from holding office and from the success of his projects and, as to his policy platform choice; he can choose any combination of bad (yet popular) policies and good (yet less popular) policies. We are able to show that politicians can choose good long term policy platforms even when those policies have bad short term results. Motivation regarding the success of the projects or an incumbent bias tends to induce the politician to implement a good policy. Unclear responsibilities or campaign promises will have mixed effects on the type of policy implemented.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 26