Policy Choices by an Incumbent - A Case with Down-Up Problem, Bias Beliefs and Retrospective Voting

Carlos Seixas, Antonio Brandao and Manuel Luís Costa ()
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Manuel Luís Costa: Faculty of Economics, University of Porto, and CEF.UP

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: The main question addressed in the model regards which type of incentives an elected politician has to choose good or bad policies. In order to answer it, we focus on two inefficiencies, recently considered in the literature: the down-up problem and voters having bias beliefs and voting retrospectively. Moreover, we consider that the politician receives utility from holding office and from the success of his projects and, as to his policy platform choice; he can choose any combination of bad (yet popular) policies and good (yet less popular) policies. We are able to show that politicians can choose good long term policy platforms even when those policies have bad short term results. Motivation regarding the success of the projects or an incumbent bias tends to induce the politician to implement a good policy. Unclear responsibilities or campaign promises will have mixed effects on the type of policy implemented.

Keywords: Policy choice; Elections; Voting behavior; Retrospective voting; Biased beliefs; Down-up problem (search for similar items in EconPapers)
JEL-codes: D72 D78 D83 D90 P16 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2013-02
New Economics Papers: this item is included in nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:485

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