Standard political agency models assume voters form accurate beliefs about how politicians are performing. However, substantial evidence from political behavior research indicates that voters have ``directional motives'' beyond accuracy. These results are often taken as evidence that voters will not be able to hold politicians accountable for their actions. We probe this conclusion by formalizing a model of accountability where voters form beliefs with both directional and accuracy motives. We classify the effects of directional motives into (1) divergence, which causes people with different preferences to hold different beliefs about relevant facts, and (2) desensitization, which leads to a weaker relationship between incumbent performance and voter beliefs. We show that divergence has an ambiguous impact on politician behavior but desensitization uniformly decreases incentives to perform well in office. A key implication of our analysis is that motivated reasoning generally does harm democratic accountability, but this is not because partisans get more polarized, but because all voters become less sensitive to changes in incumbent performance. We also explore the implications for empirical work which examines the relationship between performance indicators and incumbent vote shares. While directional motivated reasoning always weakens the strength of this relationship, we can't necessarily infer that accountability is diminished.
We provide a model of dark money in elections. An ideologically extreme donor with private information about candidate ideology and quality can advertise on behalf of a candidate. Advertising reveals information about candidate quality to voters, who can learn from either donor-funded or neutral advertising. Voters update negatively about candidate ideology when ads are known to be donor-funded. Dark money suppresses source information and allows donors to advertise candidate quality while simultaneously concealing the ideological motivations behind ad funding. However, dark money leads voters to become skeptical of all advertising, which can disadvantage donors.
We study the consequences of campaign finance disclosure laws in a model of informative campaign finance. Campaign spending can affect electoral outcomes and also signal policy information to politicians. Under mandatory disclosure donors may engage in spending that runs counter to their electoral interests in order to signal good news regarding their preferred policy. When donors can use dark money the electoral price to influence policy increases to account for the possibility that donors use public spending to signal, but secretly offset the electoral costs with dark money. Our results suggest that observable spending will tend to increase for moderate candidates and decrease for extreme candidates when dark money is allowed. We also illustrate how different social pressures affect patterns of campaign spending.
Lobbying is a potential source of corruption but is also a valuable source of information for policymakers. We analyze a game-theoretic model that shows how the threat of corruption affects the incentives of non-corrupt politicians to enlist the help of lobbyists to make more informed decisions. Politicians face a dilemma because voters cannot always tell whether a politician allows access to lobbyists in order to solicit corruption or to seek information. Thus, a non-corrupt politician may deny access to lobbyists to signal that she is non-corrupt even though doing so impedes her ability to make good policy. This signaling may decrease the welfare of the voters depending on the value of the lost policy information relative to the value of screening out corrupt politicians.
We analyze the design of an international climate agreement. In particular, we consider two goals of such an agreement: overcoming free-rider problems and adjusting for differences in mitigation costs between countries. Previous work suggests that it is difficult to achieve both of these goals at once under asymmetric information because countries free ride by exaggerating their abatement costs. We argue that independent information collection (investigations) by an international organization can mitigate this problem. In fact, though the best implementable climate agreement without investigations fails to adjust for individual differences even with significant enforcement power, a mechanism with investigations allows such adjustment and can allow implementation of the socially optimal agreement. Furthermore, when the organization has significant enforcement power the optimal agreement is achievable with minimal investigation costs. The results suggest that discussions about institutions for climate cooperation should focus on information collection as well as enforcement.
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