A Theory of Policy Advice

Posted: 11 Jan 2000

See all articles by Otto H. Swank

Otto H. Swank

Erasmus University Rotterdam - Department of Economics; Tinbergen Institute Rotterdam (TIR)

Wilko H. Letterie

Maastricht School of Business and Economics; Maastricht University

Hendrik P. van Dalen

Tilburg University, CentER; Netherlands Interdisciplinary Demographic Institute (NIDI)

Abstract

This article analyzes a model of the policy decision process in ministerial governments. A spending minister and a finance minister are involved in making a decision concerning a public project. The two ministers have partially conflicting preferences. Policy decisions are made in two stages. In the first stage the spending minister consults a technical expert to obtain information about the technical consequences of the project. If the technical consequences are favourable, in the second stage the finance minister consults a financial expert to obtain information about the financial consequences. The finance minister can veto a proposal for undertaking the project. This article illustrates the consequences of specialization for information transmission. A drawback of specialization is that projects are evaluated on the basis of their individual consequences rather than on the basis of their total consequences.

JEL Classification: H11

Suggested Citation

Swank, Otto H. and Letterie, Wilko H. and van Dalen, Hendrik P., A Theory of Policy Advice. Available at SSRN: https://ssrn.com/abstract=172520

Otto H. Swank (Contact Author)

Erasmus University Rotterdam - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Tinbergen Institute Rotterdam (TIR)

P.O. Box 1738
3000 DR Rotterdam
Netherlands
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+31 10 2120551 (Fax)

Wilko H. Letterie

Maastricht School of Business and Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
31-43-3883645 (Phone)
31-43-3213137 (Fax)

Maastricht University

P.O. Box 616
Maastricht, 6200MD
Netherlands

Hendrik P. Van Dalen

Tilburg University, CentER ( email )

Tilburg University
P.O. Box 90153
Tilburg, NL-5000 LE
Netherlands
+13 4668982 (Phone)

HOME PAGE: http://www.tilburguniversity.nl/webwijs/show/?uid=h.p.vandalen

Netherlands Interdisciplinary Demographic Institute (NIDI) ( email )

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NL-2502 AR The Hague
Netherlands
+70 356 5237 (Phone)
+70 364 7187 (Fax)

HOME PAGE: http://www.nidi.knaw.nl/en/staff/vandalen/

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