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Voter conformism and inefficient policies

Cécile Aubert and Huihui Ding

No 22-1308, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: A reelection-seeking politician makes a policy decision that can reveal her private information on whether her political orientation and capabilities will be a good fit to future circumstances. We study how she may choose inappropriate policies to hide her information, even in the absence of specific conflicts of interests, and how voters’ conformism affects her incentives to do so. Conformism is independent from policies and from voters’ perceptions; yet we identify a ‘conformism advantage’ for the incumbent that exists only when there is also an incumbency advantage. Conformism changes the incentives of the incumbent and favors the emergence of an efficient, separating equilibrium. It may even eliminate the pooling equi-librium (that can consist in inefficient persistence). Conformism has a mixed impact on social welfare however: it improves policy choices and the information available to independent vot-ers, but fosters inefficient reelection in the face of a stronger opponent. When the incumbent is ‘altruistic’ and values social welfare even when not in power, she partly internalizes this latter effect. The impact of conformism is then non monotonous.

JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2022-02-15
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
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