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The Paradox of Competence

Hans Gersbach

Swiss Federal Institute of Technology Zurich, (CER-ETH); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

April 2004

CEPR Discussion Paper No. 4362

We examine a model in which the public is unsure about the competence of a politician, and whether they are concerned about the long-term consequences of their decisions (statesman) or about the public's opinion concerning their competence and preferences (populist). The main finding suggests that the public benefits by disregarding the competence of candidates and by re-electing candidates based on their beliefs about whether a politician is a statesman. This paradox of competence might explain why politicians are so concerned about being perceived as statesmen. We also provide a rationale as to why governing by polls can be detrimental for society. Moreover, our model illustrates in general that delaying irreversible project decisions is a bad signal.

Number of Pages in PDF File: 27

Keywords: Populists, statesmen, paradox of competence, double-sided asymmetric information, polls

JEL Classification: D72, D80, D82

Date posted: May 20, 2004  

Suggested Citation

Gersbach, Hans, The Paradox of Competence (April 2004). CEPR Discussion Paper No. 4362. Available at SSRN: http://ssrn.com/abstract=548762

Contact Information

Hans Gersbach (Contact Author)
Swiss Federal Institute of Technology Zurich, (CER-ETH) ( email )
Zürichbergstrasse 18
Zurich, 8092
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072

CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN

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References:  36
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