Artikel

Gridlock and inefficient policy instruments

Why do rational politicians choose inefficient policy instruments? Environmental regulation, for example, often takes the form of technology standards and quotas even when cost-effective Pigou taxes are available. To shed light on this puzzle, we present a stochastic game with multiple legislative veto players and show that inefficient policy instruments are politically easier than efficient instruments to repeal. Anticipating this, heterogeneous legislators agree more readily on an inefficient policy instrument. We describe when inefficient instruments are likely to be chosen, and predict that they are used more frequently in (moderately) polarized political environments and in volatile economic environments. We show conditions under which players strictly benefit from the availability of the inefficient instrument.

Sprache
Englisch

Erschienen in
Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 14 ; Year: 2019 ; Issue: 4 ; Pages: 1483-1534 ; New Haven, CT: The Econometric Society

Klassifikation
Wirtschaft
Positive Analysis of Policy Formulation and Implementation
Thema
Dynamic games
bargaining
political economy
political instruments

Ereignis
Geistige Schöpfung
(wer)
Austen-Smith, David
Dziuda, Wioletta
Harstad, Bård
Loeper, Antoine
Ereignis
Veröffentlichung
(wer)
The Econometric Society
(wo)
New Haven, CT
(wann)
2019

DOI
doi:10.3982/TE3329
Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Austen-Smith, David
  • Dziuda, Wioletta
  • Harstad, Bård
  • Loeper, Antoine
  • The Econometric Society

Entstanden

  • 2019

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