Reputational Concerns in Political Agency Models

Reputational Concerns in Political Agency Models Andrew Yuichi Lemon 2005 Citizens in democracies can be thought of as hiring politicians to run the government. In this sense, elections are contracts. The citizens are the principals and retain politicians as agents who are responsible for making policy decisions. Provided politicians value holding office in the future, elections generate incentives for politicians to appear honest and able, and deter politicians from choosing corrupt policies. This literature is known as political agency (e.g., Ferejohn 1986)—it applies principal-agent models to analyze the behavior of politicians and the efficiency of their policies when citizens face adverse-selection and moral-hazard problems in their election decisions. Chapters 1 and 2 of this dissertation further develop political-agency models to include strategic behavior by the challenger: unlike other political-agency models where the challenger is a static alternative to the incumbent, the challenger acts to maximize her payoffs. The first chapter asks whether political debate can improve the efficiency of government policies. The second chapter builds a Bayesian updating model to examine the incentives behind policy flip-flopping. The third chapter formalizes a political economy critique against strategic trade policy using a political-agency model. Reputational Concerns in Political Agency Models A Dissertation Presented to the Faculty of the Graduate School of Yale University in Candidacy for the Degree of Doctor of Philosophy by Andrew Yuichi Lemon Dissertation Director: Stephen Morris