Strategic transparency and electoral pressure

Laura Moretti () and Toru Suzuki

No 2012/19, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: This paper investigates how an office-motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re-election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. A more popular challenger can reduce the probability to enhance transparency, while voters can be better off due to a more informative signaling. It is also shown that a higher level of public interest in fiscal issues can increase the probability of enhancing transparency, while voters can be worse off by a less informative signaling.

Keywords: Fiscal Transparency; Electoral Pressure; Signaling Game; Perfect Sequential Equilibrium (search for similar items in EconPapers)
JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-cdm and nep-cta
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Journal Article: Strategic Transparency and Electoral Pressure (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:201219

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