Policy Myopia

Toke Aidt, Jayasri Dutta () and Elena Loukoianova ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: This paper develops a theory of policy myopia. Policy myopia arises when rational voters set performance standards that allow elected politicians to distort the portfolio of public investments towards short-term investments. We show that the fact that voters cannot observe immediately how much politicians invested in certain types of public goods is not in itself sufficient to generate policy myopia. Policy myopia, then, arises in societies where electoral control is imperfect or in society where tax revenues cannot be committed in advance. The analysis is motivated by a number of stylized facts about public spending patterns across time and space.

Keywords: Myopia; public goods; electoral accountability (search for similar items in EconPapers)
JEL-codes: D72 D82 (search for similar items in EconPapers)
Pages: 33
Date: 2003-10
New Economics Papers: this item is included in nep-pol
Note: PE, Ma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0344

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