Showing 81 - 90 of 166
We propose a flexible majority rule for central bank councils where the size of the majority depends monotonically on the change in interest rate within a particular time frame. Small changes in interest rate require a small share of supporting votes, even less than 50%. We show that flexible...
Persistent link: https://www.econbiz.de/10005067504
As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is...
Persistent link: https://www.econbiz.de/10005067506
When politicians are provided with insufficient incentives by the democratic election mechanism, social welfare can be improved by threshold contracts. A threshold contract stipulates the performance level that a politician must reach in order to obtain the right to stand for re-election. 'Read...
Persistent link: https://www.econbiz.de/10005656153
We examine a model in which the public is unsure about the competence of a politician, and whether they are concerned about the long-term consequences of their decisions (statesman) or about the public’s opinion concerning their competence and preferences (populist). The main finding suggests...
Persistent link: https://www.econbiz.de/10005661555
Democratic processes may not take the welfare of future generations sufficiently into account and thus may not achieve sustainability. We show that the dual democratic mechanism – rejection/support rewards (RSRs) for politicians and elections – can achieve sustainability. RSRs stipulate that...
Persistent link: https://www.econbiz.de/10005662383
We develop democratic mechanisms where individual utilities are not observable by other people at the legislative stage. We show that an appropriate combination of three rules can yield efficient provision of public projects: first, flexible and double majority rules where the size of the...
Persistent link: https://www.econbiz.de/10005666599
Vote-buying is widely used by parties in developing countries to influence the outcome of elections. We examine the impact of vote-buying on growth. We consider a model with a poverty trap where redistribution can promote growth. We show that vote-buying contributes to the persistence of poverty...
Persistent link: https://www.econbiz.de/10005626707
As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is...
Persistent link: https://www.econbiz.de/10005626710
We examine the consequences when the public is unsure about the ability of governments to foresee the effects of decisions. Governments with much information should invest either immediately or never. Governments that are not well informed should wait for better information. But since...
Persistent link: https://www.econbiz.de/10005615695
We consider a model with a politician facing a multi-task problem while in office. The re-election mechanism distorts the allocation of effort in favour of tasks whose outcomes can be measured more precisely than others. We show that a combination of elections and incentive contracts can...
Persistent link: https://www.econbiz.de/10005789074