Candidate Entry, Screening, and the Political Budget Cycle

March 1, 2002

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Format: Chicago

Eric Le Borgne, and Ben Lockwood. Candidate Entry, Screening, and the Political Budget Cycle, (USA: International Monetary Fund, 2002) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We investigate whether private information about citizens' competence in political office can be revealed by their entry and campaign expenditure decisions. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing. We apply these results to Rogoff's (1990) political budget cycle model: as interests are common, low-ability candidates are screened out at the entry stage, and so there is no signaling via fiscal policy. In a variant of Rogoff's model where citizens differ in honesty, interests are conflicting, so the political budget cycle can persist.

Subject: Budget planning and preparation, Expenditure, Financial sector policy and analysis, Fiscal policy, Moral hazard, Public financial management (PFM), Revenue administration

Keywords: And Political Budget Cycles, Asymmetric Information, Budget planning and preparation, Campaign expenditure decision, Candidate entry, Citizen-Candidate, Entry decision, Entry stage, Moral hazard, Mover accent, Office holder, Representative Democracy, Signaling Games, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/048
Stock No:

WPIEA0482002
ISBN:

9781451972658
ISSN:

1018-5941

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