Voters’ commitment problem and the timing of welfare-program reforms
Hollanders,D.A. Vis,B.
Hollanders,D.A.
Vis,B.
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.
Description
Appeared earlier as CentER Discussion Paper 2009-093
Date
2013
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Research Projects
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Citation
Hollanders, D A & Vis, B 2013, 'Voters’ commitment problem and the timing of welfare-program reforms', Public Choice, vol. 155, no. 3-4, pp. 433-448. https://doi.org/10.1007%2fs11127-011-9872-1