Are We Better Off If Our Politicians Have More Information?

Johan N. M. Lagerlöf ()

Public Economics from EconWPA

Abstract: This paper studies a model of public policy with heterogenous citizens/voters and two public goods: one (roads) is chosen directly by an elected policymaker, and the other (pollution) depends stochastically on the amount of roads. Both a one-country and a two-country version of the model are analyzed, the latter displaying externalities across the countries which creates incentives for free riding and strategic delegation. The welfare effects of providing the policymaker with information about the relationship between roads and pollution are investigated, and it is shown that more information hurts some – sometimes even all – citizens. In particular, the absence of an institution for information gathering can serve as a commitment device for a country, helping it avoid the free-riding problem. Implications for the welfare effects of “informational lobbying” are discussed.

Keywords: Public information acquisition; value of information; welfare; interest groups; informational lobbying; strategic delegation (search for similar items in EconPapers)
JEL-codes: D69 D78 D89 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm
Date: Written
Note: Type of Document - ; pages: 23; figures: na
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http://129.3.20.41/eps/pe/papers/0209/0209001.pdf (application/pdf)

Related works:
Working Paper: Are we Better Off if our Politicians Have More Information? (2003)
Journal Article: Are We Better Off if Our Politicians Have More Information? (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0209001

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