The Paradox of Competence

Hans Gersbach

No 4362, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine a model in which the public is unsure about the competence of a politician, and whether they are concerned about the long-term consequences of their decisions (statesman) or about the public?s opinion concerning their competence and preferences (populist). The main finding suggests that the public benefits by disregarding the competence of candidates and by re-electing candidates based on their beliefs about whether a politician is a statesman. This paradox of competence might explain why politicians are so concerned about being perceived as statesmen. We also provide a rationale as to why governing by polls can be detrimental for society. Moreover, our model illustrates in general that delaying irreversible project decisions is a bad signal.

Keywords: Populists; Statesmen; Paradox of competence; Double-sided asymmetric information; Polls (search for similar items in EconPapers)
JEL-codes: D72 D80 D82 (search for similar items in EconPapers)
Date: 2004-04
New Economics Papers: this item is included in nep-cdm, nep-evo and nep-mic
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Citations: View citations in EconPapers (3)

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