Policy Competition, Imitation and Coordination Under Uncertainty

The paper analyzes under what circumstances policymakers experiment with policies with uncertain outcomes, when they prefer to imitate policies initiated in other countries, and when they prefer to coordinate policies internationally. Policymakers have private costs of active policies and compete in...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 18-2022)
Format: Article
Language:English
Published: Philipps-Universität Marburg 2022
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Online Access:PDF Full Text
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Summary:The paper analyzes under what circumstances policymakers experiment with policies with uncertain outcomes, when they prefer to imitate policies initiated in other countries, and when they prefer to coordinate policies internationally. Policymakers have private costs of active policies and compete internationally in a yardstick competition which gives rise to a potential distortion between what citizens want and what policymakers do. I find that policymakers’ policies as well as regime choice deviate from what citizens want but that an increase in uncertainty about policy outcomes decreases this distortion.
Physical Description:18 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0727