Strategic Transparency and Electoral Pressure

Publication Type:
Journal Article
Citation:
Journal of Public Economic Theory, 2016, 18 (4), pp. 624 - 641
Issue Date:
2016-01-01
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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. It is also shown that electoral pressure can have a nonmonotonic effect on transparency, but a higher electoral pressure always increases the informativeness of signaling and the voter's utility.
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