Policy Myopia
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Authors
Aidt, Toke S.
Dutta, J.
Loukoianova, Elena
Publication Date
2004-06-16Series
Cambridge Working Papers in Economics
Publisher
Faculty of Economics
Language
en_GB
Type
Working Paper
Metadata
Show full item recordCitation
Aidt, T. S., Dutta, J., & Loukoianova, E. (2004). Policy Myopia. https://doi.org/10.17863/CAM.5061
Abstract
This paper develops a theory of policy myopia. Policy myopia arises when rational voters set performance standards that allow elected politicians to distort the portfolio of public investments towards short-term investments. We show that the fact that voters cannot observe immediately how much politicians invested in certain types of public goods is not in itself sufficient to generate policy myopia. Policy myopia, then, arises in societies where electoral control is imperfect or in society where tax revenues cannot be committed in advance. The analysis is motivated by a number of stylized facts about public spending patterns across time and space.
Keywords
Classification-JEL: D72; D82, Myopia; public goods; electoral accountability
Identifiers
This record's DOI: https://doi.org/10.17863/CAM.5061
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