Rational Ignorance, Elections, and Reform

Carlo Prato () and Stephane Wolton ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies how voters' demand for reform affects the probability that economic reforms are adopted and, conditional on being adopted, their quality. We consider a model of electoral competition with rationally inattentive voters in which the success of policy changes is tied to a politician's unobservable competence. We show that when the demand for reform is high, the electoral process becomes over-responsive: Candidates promise reforms despite their inability to carry-out welfare-improving policy changes. As voters must then choose between potentially harmful reforms or no reform, high demand for reform tends to be associated with lower probability of reform and/or lower quality of reform. We explain how our results help organize the mixed evidence regarding the impact of crises on the likelihood of reform.

Keywords: Crises; Reforms; Rationally Ignorant Voters; Campaigns (search for similar items in EconPapers)
JEL-codes: D70 D72 D78 D83 (search for similar items in EconPapers)
Date: 2013-03-16, Revised 2015-12-10
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 (14)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68638

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