22 Pages Posted: 15 Mar 2000
Date Written: November 1999
Are politicians who are concerned about the public's beliefs regarding their competence and their preferences bad politicians? We consider a model where the public is unsure about the competence of an agent and whether the agent is concerned about the consequences of policy decisions (statesman) or only about the public's beliefs (populist). We show that populists distort their decisions in order to avoid being recognized as incompetent or as populists. If the public bases its reelection decision on competence, policy decisions are extremely distorted. Because of this paradox of competence, voters should reelect candidates mainly based on their beliefs about whether a politician is a statesman. This might explain why politicians are so concerned to be perceived as a statesman.
JEL Classification: D72, D73
Suggested Citation: Suggested Citation