The Stakes and Informativeness Trade-Off: Electoral Incentives to Implement Programmatic Transfers

62 Pages Posted: 5 Aug 2020 Last revised: 14 Sep 2021

Date Written: August 24, 2020

Abstract

If a transfers policy is programmatic (it is transparent and non-manipulable), is it irrelevant for politicians' electoral fortunes? I show that the answer is no with a political agency model where politicians' competence is uncertain to all. In my setup, an incumbent can allocate a budget to public goods and transfers. These policies differ in one key dimension: the provision of public goods fluctuates more over time relative to transfers. When the incumbent increases the budget to public goods, two effects arise: his performance in office today reveals more information about his identity (an informativeness effect), and voters' anticipation of narrow transfers tomorrow increases the salience of political selection (a stakes effect). To the incumbent, these two effects move in opposing directions and, consequently, the strategic allocation of the budget helps him to advance his electoral fortunes.

Keywords: Elections, Experimental Design, Information, Public Goods, Transfer

JEL Classification: C90, D72, D82, D83, H41, I38

Suggested Citation

Tomasi, Arduino, The Stakes and Informativeness Trade-Off: Electoral Incentives to Implement Programmatic Transfers (August 24, 2020). Available at SSRN: https://ssrn.com/abstract=3646289 or http://dx.doi.org/10.2139/ssrn.3646289

Arduino Tomasi (Contact Author)

The University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

HOME PAGE: http://www.arduinotomasi.com

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
85
Abstract Views
1,107
Rank
531,415
PlumX Metrics