The Politics of (No) Compromise: Information Acquisition, Policy Discretion, and Reputation

TL;DR

This paper models how career concerns influence decision-makers' incentives to acquire information and pursue reforms, showing that public intervention and strategic delegation can promote better policy decisions.

Contribution

It introduces a formal model linking career concerns, information acquisition, and policy discretion, highlighting mechanisms to improve reform decisions.

Findings

Public can incentivize information gathering by limiting discretion.

Career concerns weaken incentives for information acquisition.

Strategic delegation can enhance reform outcomes.

Abstract

Precise information is essential for making good policies, especially those regarding reform decisions. However, decision-makers may hesitate to gather such information if certain decisions could have negative impacts on their future careers. We model how decision-makers with career concerns may acquire policy-relevant information and carry out reform decisions when their policy discretion can be limited ex ante. Typically, decision-makers with career concerns have weaker incentives to acquire information compared to decision-makers without such concerns. In this context, we demonstrate that the public can encourage information acquisition by eliminating either the "moderate policy" or the status quo from decision-makers' discretion. We also analyze when reform decisions should be strategically delegated to decision-makers with or without career concerns.