Reputation-concerned policy makers and institutional status quo bias

• 成果类型: Article
• 署名作者: Fu, Qiang; Li, Ming
• 署名单位: National University of Singapore; Concordia University - Canada
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.11.008
• 发表日期: 2014
• 页码: 15-25
• 关键词: reform; reputation; ability; conservatism

摘要

We study the policy choice of an office-holding politician who is concerned with the public's perception of his capabilities. The politician decides whether to maintain the status quo or to conduct a risky reform. The reform's success depends critically on the politician's capabilities, which are privately known to the politician. The public observes both his policy choice and the outcome of the reform, and assesses his competence. We show that the politician may engage in socially detrimental reform in order to be perceived as more capable. We investigate the institutional remedy that balances the gains and costs when the policy maker is subject to reputation concerns. Conservative institutions that thwart beneficial reform may potentially improve social welfare. (C) 2013 Elsevier B.V. All rights reserved.