A Political Winner's Curse: Why Preventive Policies Pass Parliament so Narrowly

Arbeitspapier

Preventive policy measures such as bailouts often pass parliament very narrowly. We present a model of asymmetric information between politicians and voters which rationalizes this narrow parliamentary outcome. A successful preventive policy impedes the verification of its own necessity. When policy intervention is necessary but voters disagree ex-ante, individual politicians have an incentive to loose the vote in parliament in order to be rewarded by voters ex-post. Comfortable vote margins induce incentives to move to the loosing fraction to avoid this winner's curse. In equilibrium, parliamentary elections over preventive policies are thus likely to end at very narrow margins.

Angaben zum Objekt

• ISBN: 978-3-86788-388-7
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Ruhr Economic Papers ; No. 336

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Asymmetric and Private Information; Mechanism Design
• Thema: Political economy ; asymmetric information

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): an de Meulen, Philipp ; Bredemeier, Christian
• Ereignis: Veröffentlichung
• (wer): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (wo): Essen
• (wann): 2012

Weitere Informationen

• DOI: doi:10.4419/86788388
• Handle: http://hdl.handle.net/10419/61439
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ