A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency

Guido Merzoni () and Federico Trombetta

No dis2102, DISEIS - Quaderni del Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo from Università Cattolica del Sacro Cuore, Dipartimento di Economia internazionale, delle istituzioni e dello sviluppo (DISEIS)

Abstract: We study the implications of state dependent costs of policy mismatch in political agency models where politicians have reputational concerns and "good" politicians share the same objectives with the voters. We find that state-dependent costs can increase the set of parameters where pandering is an equilibrium strategy. Indeed, in our model, pandering can arise even without office rents. Moreover, we show that voters do not necessarily prefer biased politicians to be in favour of the policy that produces the cheapest expected cost of mismatch. We discuss the implications of those results for populism, environmental policies and the equilibrium incentives to over- or under-provide lockdowns or other mitigation measures.

JEL-codes: D72 D78 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cdm, nep-env and nep-pol
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