Public Choice

, Volume 155, Issue 3–4, pp 433–448 | Cite as

Voters’ commitment problem and reforms in welfare programs

Open Access
Article

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.

Keywords

Commitment Political economy Reform Welfare-programs 

JEL Classification

D72 D78 H11 H5 I38 J48 

Supplementary material

11127_2011_9872_MOESM1_ESM.pdf (54 kb)
(PDF 124 kB)

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Copyright information

© The Author(s) 2011

Authors and Affiliations

  1. 1.TiasNimbas Business SchoolTilburg UniversityTilburgThe Netherlands
  2. 2.Department of Political ScienceVU University AmsterdamAmsterdamThe Netherlands

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