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Voters’ commitment problem and reforms in welfare programs

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.

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Correspondence to Barbara Vis.

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Hollanders, D., Vis, B. Voters’ commitment problem and reforms in welfare programs. Public Choice 155, 433–448 (2013). https://doi.org/10.1007/s11127-011-9872-1

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Keywords

  • Commitment
  • Political economy
  • Reform
  • Welfare-programs

JEL Classification

  • D72
  • D78
  • H11
  • H5
  • I38
  • J48