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  3. American Economic Review
  4. April 2015
  5. Competitive Policy Development

Competitive Policy Development

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Abstract

We present a model of policy development in which competing factions have different ideologies, yet agree on certain common objectives. Policy developers can appeal to a decision maker by making productive investments to improve the quality of their proposals. These investments are specific to a given proposal, which means that policy developers can potentially obtain informal agenda power. Competition undermines this agenda power, forcing policy developers to craft policies that are better for the decision maker. This beneficial effect is strongest if policy developers have divergent ideological preferences, because their intense desire to affect policy motivates them to develop higher quality proposals. (JEL D72, D73, D78, E61)

Citation

Hirsch, Alexander V., and Kenneth W. Shotts. 2015. "Competitive Policy Development." American Economic Review, 105 (4): 1646-64. DOI: 10.1257/aer.20130250

Additional Materials

JEL Classification

  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
  • D78 Positive Analysis of Policy Formulation and Implementation
  • E61 Policy Objectives; Policy Designs and Consistency; Policy Coordination