Replacement and Reputation

Navin Kartik, Elliot Lipnowski and Harry Pei
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Navin Kartik: Department of Economics, Yale University
Elliot Lipnowski: Department of Economics, Yale University
Harry Pei: Department of Economics, Northwestern University

No 2483, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Does electoral replacement ensure that officeholders eventually act in voters' interests? We study a reputational model of accountability. Voters observe incumbents' performance and decide whether to replace them. Politicians may be "good" types who always exert effort or opportunists who may shirk. We find that good long-run outcomes are always attainable, though the mechanism and its robustness depend on economic conditions. In environments conducive to incentive provision, some equilibria feature sustained effort, yet others exhibit some long-run shirking. In the complementary case, opportunists are never fully disciplined, but selection dominates: every equilibrium eventually settles on a good politician, yielding permanent effort.

Pages: 64 pages
Date: 2025-12-15
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