Government Information Transparency

Joan Esteban (), Facundo Albornoz and Paolo Vanin

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a benevolent government may ex-post be non-informative, in an attempt to countervail the tax distortion with a "second best" compensating distortion in information. This result provides a rationale for independent national statistical offices, committed to truthful communication. We also find that whether inequality in income distribution favors or harms government transparency depends on labor supply elasticity.

Keywords: Government announcements; Cheap talk; Asymmetric in- formation; Inequality (search for similar items in EconPapers)
JEL-codes: D82 E61 (search for similar items in EconPapers)
Pages: 47
Date: 2009-05-14, Revised 2010-02-10
New Economics Papers: this item is included in nep-cta
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http://pareto.uab.es/wp/2009/77409.pdf (application/pdf)

Related works:
Working Paper: Government Information Transparency (2015)
Working Paper: Government Information Transparency (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:774.09

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