Working Paper: CEPR ID: DP9467
Authors: Antonio Estache; Renaud Foucart
Abstract: We study a political system in which voters can optimally pick between political platforms, but cannot screen the quality of individual politicians associated with these platforms. A bad individual achievement can correspond to either incompetence (adverse selection) or corruption (moral hazard). Information could improve, if independent experts assess achievements as compared to commitments, allowing independent judges to investigate possible corruption. We find that while good experts are always beneficial as they increase transparency, the impact of the quality of judges is ambiguous. Above a threshold, with risk-averse social planners, good judges increase the incentive-compatible punishment of politicians, at the cost of possible judiciary mistakes.
Keywords: political accountability; expert evaluations; judicial oversight; corruption; incompetence
JEL Codes: D7; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| quality of expert evaluations (C52) | transparency of political actions (D73) |
| quality of judges (K40) | level of punishment of politicians (D73) |
| quality of judges (K40) | behavior of politicians (D72) |
| quality of judges (K40) | moral hazard (G52) |
| social planner's preferences (D71) | judicial outcomes (K41) |
| quality of judges (K40) | entry decisions of politicians (D72) |