Voter Conformism and Inefficient Policies
44 Pages Posted: 12 Apr 2019
Date Written: February 22, 2019
We study the efficiency of policies when some voters are conformists who like being on the winner's side and policies signal information. A re-election seeking incumbent has private information on both her ability and policy adequateness. Repealing a policy signals a mistake, which downgrades her perceived ability. Hence possibly inefficient policy persistence. Conformism is independent from the policies and from voters' perception, yet we identify a 'conformism advantage' for the incumbent that exists only when there is also incumbency advantage. We contrast an efficient equilibrium and a pooling, pandering one. Strong conformism makes pandering less likely, up to eliminating it. Weak conformism can however deteriorate welfare and increase pandering, but paradoxically only when the incumbent is 'altruistic' and values social welfare when not in power. We also discuss the impact of opinion polls and media coverage on coordination among conformist voters.
Keywords: conformity, pandering, incumbency advantage, signaling
JEL Classification: D72, D82
Suggested Citation: Suggested Citation