Credible Communication in Dynastic Government

Roger Lagunoff ()

No WP34, Wallis Working Papers from University of Rochester - Wallis Institute of Political Economy

Abstract: It has been suggested that ``horizontal accountability," i.e., a system of governance where auditing functions lie outside the executive branch, can ensure credible disclosure of information. This paper examines a model of intertemporal information provision in government that suggests a cautious approach to that view. Government consists of a succession of regimes, each ruling for one period before relinquishing power to a successor. Without external auditing, credible communication cannot be sustained. Hence, expenditure policies are suboptimal. Even with external auditing, credible communication requires ideological conflicts between the auditor and the regime. Moreover, because information transmission stops when the auditor's and the regime's biases coincide, effective deterrents even in the ``good" periods (when the auditor's and the regime's biases differ) are difficult to construct. As a result, in standard constructions of equilibrium, efficient policy choices are shown to be unsustainable

Keywords: dynastic government; dynamic policy bias; auditor neutrality; credible communication (search for similar items in EconPapers)
JEL-codes: C73 D72 D73 D82 H11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: Written
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Related works:
Working Paper: Credible Communication in Dynastic Government (2002)
Working Paper: Credible Communication in Dynastic Government
Journal Article: Credible communication in dynastic government (2006)
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