Voter Preferences, Electoral Promises, and the Composition of Public Spending
This paper proposes and empirically tests a new demand-side explanation for distortions in public spending composition. Voters prefer spending with certain and immediate benefits when they have low trust in electoral promises and high discount rates. The paper incorporates these characteristics of voter choices into a probabilistic voting model with public spending tradeoffs. In equilibrium, candidates promising larger allocations to transfers and short-term public goods are more likely to win elections in settings with low trust and high impatience. An original survey of individual-level preferences for public spending in seven Latin American capital cities provides observational and experimental evidence consistent with the model-derived hypotheses. Respondents reporting low trust in politician promises are more likely to prefer transfers to public goods; respondents with high discount rates prefer short-term to long-term spending. These patterns also appear in country-level data on spending outcomes from the last two decades.
| Main Author: | |
|---|---|
| Other Authors: | |
| Language: | English |
| Published: |
Inter-American Development Bank
|
| Subjects: | Elections, Public Investment, Crime and Violence, Public Expenditure, Government Budget, Education Expenditure, Public Good, Interest Rate, D72 - Political Processes: Rent-Seeking Lobbying Elections Legislatures and Voting Behavior, H20 - Taxation Subsidies and Revenue: General, O10 - Economic Development: General, H50 - National Government Expenditures and Related Policies: General, public investment;public goods;Trust;Spending composition;Voter preferences;Discounting;Transfers, |
| Online Access: | http://dx.doi.org/10.18235/0002434 https://publications.iadb.org/en/voter-preferences-electoral-promises-and-the-composition-of-public-spending |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|