Trial and Error? Reelection Concerns and Policy Experimentation During the U.S. Welfare Reform

53 Pages Posted: 4 Sep 2015

See all articles by Andreas Bernecker

Andreas Bernecker

University of Mannheim - Department of Economics

Pierre Boyer

Ecole Polytechnique, Palaiseau - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Christina Gathmann

Alfred-Weber Institut; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

We study the political economy of policy innovations during the U.S. welfare reform in 1996. Specifically, we investigate how reputation concerns among governors influence the decision to experiment with welfare policies. In line with a political agency model, our empirical results suggest that governors with high reputation among the electorate are less likely to experiment with welfare policies than governors with low reputation. Yet, governors with high reputation who are less concerned about reelection actually experiment more than governors striving for reelection. Overall, our findings imply that reelection concerns may inhibit innovation in the public sector.

Keywords: policy innovation, reputation concerns, U.S. welfare reform, experimentation, reelection concerns

JEL Classification: I38, H11, H77, D78, D83

Suggested Citation

Bernecker, Andreas and Boyer, Pierre C. and Gathmann, Christina, Trial and Error? Reelection Concerns and Policy Experimentation During the U.S. Welfare Reform. IZA Discussion Paper No. 9113. Available at SSRN: https://ssrn.com/abstract=2655062

Andreas Bernecker (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Pierre C. Boyer

Ecole Polytechnique, Palaiseau - Department of Economics ( email )

Route de Saclay
Palaiseau, 91120
France

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Christina Gathmann

Alfred-Weber Institut ( email )

Bergheimer Str. 20
Heidelberg, 69115
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/index_html?lang=en&mainframe=http%3A//www.iza.org/en/webcontent/personnel/photos%

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.stanford.edu/~cgathman

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