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Transparency and manipulation of public accounts

Gavazza, Alessandro and Lizzeri, Alessandro (2011) Transparency and manipulation of public accounts. Journal of Public Economic Theory, 13 (3). pp. 327-349. ISSN 1097-3923

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Identification Number: 10.1111/j.1467-9779.2011.01502.x

Abstract

We study the policy choices of an incumbent politician when voters imperfectly observe aggregate spending and the incumbent’s ability. We show that total spending is decreasing in the transparency of spending, but increasing in the transparency of the incumbent’s ability. The model further provides a possible explanation of the choice of inefficient tools of redistribution, and investigates the incentives for politicians to manipulate public accounts. We show that politicians may choose inefficient and manipulable tools, but that this choice has positive welfare consequences because it leads to a reduction in spending.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2011 The Authors
Divisions: Economics
Subjects: H Social Sciences > HJ Public Finance
JEL classification: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General
Sets: Departments > Economics
Date Deposited: 19 Feb 2014 09:58
Last Modified: 20 Aug 2019 18:18
URI: http://eprints.lse.ac.uk/id/eprint/55737

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