University of Illinois at Urbana-Champaign - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
University of Bielefeld; IfW Kiel; KU Leuven; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
May 7, 2004
In many important political problems, citizens can directly participate in the political decision making through a referendum. These settings are often characterized by uncertainty over the future consequences of the decision, the possibility of learning about these over time, and the irreversibility of the decision once it has been made.
In our model, a politician who may be biased (relative to the median voter) chooses the timing of the referendum. We analyze how the optimal timing decision depends on the political environment and the bias of the politician. We show that the power to schedule a referendum allows both positively and negatively biased politicians to implement decisions different from those preferred by the median voter.
Number of Pages in PDF File: 21
Keywords: Referendum, timing problems, dynamic political economy
JEL Classification: C7, D7working papers series
Date posted: May 7, 2004
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