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Strategic Transparency and Electoral Pressure |
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| Authors: | LAURA MORETTI TORU SUZUKI |
| Affiliation: | 1. Central Bank of Ireland;2. University of Technology Sydney |
| Abstract: | This paper investigates how an office‐motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re‐election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. It is also shown that electoral pressure can have a nonmonotonic effect on transparency, but a higher electoral pressure always increases the informativeness of signaling and the voter's utility. |
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