Abstract
When will a vote-seeking government pursue unpopular welfare reforms that are likely to cost it votes? Using a game-theoretical model, we show that a government enacts reforms that are unpopular with the median voter during bad economic times, but not during good ones. The key reason is that voters cannot commit to re-elect a government that does not reform during bad times. This voters' commitment problem stems from economic voting, i. e., voters' tendency to punish the government for a poorly performing economy. The voter commitment problem provides an explanation for the empirical puzzle that governments sometimes enact reforms that voters oppose. © 2011 The Author(s).
Original language | English |
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Pages (from-to) | 433-448 |
Journal | Public Choice |
Volume | 155 |
Issue number | 3 |
Early online date | 15 Aug 2011 |
DOIs | |
Publication status | Published - 2013 |