Voters’ Commitment Problem and Welfare-Program Reforms
CentER Discussion Paper Series No. 2009-93
28 Pages Posted: 4 Dec 2009
Date Written: November 24, 2009
This paper proposes that reforms by vote-seeking governments and the existence of reform-adverse voters are logically compatible. This results from a commitment problem on the part of voters. Due to economic voting voters cannot credibly commit to reelect a non-reforming government during a recession. The empirical implication of this voter commitment mechanism is that governments only adopt visible welfare-program reforms during economic lows, which is what the empirical political-economic literature has established.
Keywords: Commitment, Political Economy, Reform, Welfare-Programs
JEL Classification: D72, D78, H11, H5, I38, J48
Suggested Citation: Suggested Citation