 Rational ignorance, populism, and reformCarlo Prato and Stephane Wolton () LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library Abstract: This paper studies how voters' demand for economic reforms affects the probability that successful or populist reforms are adopted. We study a model of electoral competition with rationally ignorant voters in which the success of a reform is tied to a politician's unobservable competence. We show that when voters' demand for reform is high, candidates engage in a form of populism and propose reformist agendas regardless of their ability to successfully carry them out. As voters are then faced with either risky reformers or policy inaction, the relationship between demand for reform and the probability that any (i.e., genuine or populist) policy change is implemented depends on how harmful botched reforms are. Our results help organize the mixed empirical evidence regarding the impact of crises on the likelihood of reform. They also suggest that the rise of populism may cause political disenchantment rather than the other way round. Keywords: crisis; populism; rational inattention (search for similar items in EconPapers) Published in European Journal of Political Economy, 2, December, 2017, 50, pp. 119 -135. ISSN: 0176-2680 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86371 Access Statistics for this paper More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC. |
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