Candidate Entry, Screening, and the Political Budget Cycle

39 Pages Posted: 29 Jan 2006

See all articles by Eric Le Borgne

Eric Le Borgne

International Monetary Fund (IMF)

Ben Lockwood

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 2002

Abstract

We investigate whether private information about citizens' competence in political office can be revealed by their entry and campaign expenditure decisions. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing. We apply these results to Rogoff's (1990) political budget cycle model: as interests are common, low-ability candidates are screened out at the entry stage, and so there is no signaling via fiscal policy. In a variant of Rogoff's model where citizens differ in honesty, interests are conflicting, so the political budget cycle can persist.

Keywords: Asymmetric Information, Citizen-Candidate, Representative Democracy, Signaling Games, Political Budget Cycles

JEL Classification: D72, D78, D82, E82, E62, H60

Suggested Citation

Le Borgne, Eric and Lockwood, Ben, Candidate Entry, Screening, and the Political Budget Cycle (March 2002). IMF Working Paper No. 02/48, Available at SSRN: https://ssrn.com/abstract=879445

Eric Le Borgne (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Ben Lockwood

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
+44 24 7652 8906 (Phone)
+44 24 7657 2548 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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