Candidate Entry, Screening, and the Political Budget Cycle
IMF Working Papers, March 1, 2002
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- Candidate Entry, Screening, and the Political Budget Cycle
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Bibliographic details
- Authors: Eric Le Borgne, Ben Lockwood
- Published: March 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451972658.001
Core findings
- Private information about citizens' competence for political office can be revealed by their entry and campaign expenditure decisions only when voters and candidates have common interests; entry is not revealing when interests conflict.
- In environments with common interests, low-ability candidates are screened out at the entry stage, eliminating the need for signaling via fiscal policy.
- In a variant where citizens differ in honesty (interests conflict), the political budget cycle can persist because entry and expenditure decisions do not reliably reveal competence.
Application to Rogoff (1990) political budget cycle model
- When applied to Rogoff's (1990) model, common interests between voters and candidates lead to screening of low-ability candidates at entry, so there is no signaling through fiscal policy.
- In the model variant with heterogeneous honesty among citizens (conflicting interests), screening fails and signaling through fiscal policy (the political budget cycle) can continue.
Research scope and methodology (as described)
- Investigates candidate entry and campaign expenditure decisions as potential signals of private information about competence.
- Analyzes how the informational content of entry depends on the alignment of interests between voters and candidates.
- Applies theoretical results to variants of the Rogoff (1990) political budget cycle framework.
Content in this bundle
- Candidate Entry, Screening, and the Political Budget Cycle - WP/02/48, REVISED