Elections and Deceptions: An Experimental Study on the Behavioral Effects of Democracy

Abstract

Traditionally, the virtue of democratic elections has been seen in their role as means of screening and sanctioning shirking public officials. This paper proposes a novel rationale for elections and political campaigns considering that candidates incur psychological costs of lying, in particular from breaking campaign promises. These non-pecuniary costs imply that campaigns influence subsequent behavior, even in the absence of reputational or image concerns. Our lab experiments reveal that promises are more than cheap talk. They influence the behavior of both voters and their representatives. We observe that the electorate is better off when their leaders are elected democratically rather than being appointed exogenously - but only in the presence of electoral campaigns. In addition, we find that representatives are more likely to serve the public interest when their approval rates are high. Altogether, our results suggest that elections and campaigns confer important benefits beyond their screening and sanctioning functions.

Keywords: Costs of Lying, Electoral Competition, Laboratory Experiment

JEL Classification: D72, C92, D03