Imperfect Information, Democracy and Populism

J. Binswanger, J. Prüfer

Research output: Working paperDiscussion paperOther research output

Abstract

The modern world is complex and difficult to understand for voters, who may hold beliefs that are at variance with reality. Politicians face incentives to pander to voters' beliefs to get reelected. We analyze the welfare e ffects of this pandering and show that it entails both costs and bene fits. Moreover, we explore optimal constitutional design in the presence of imperfect information about how the world works. We compare indirect democracy to direct democracy and to delegation of policy making to independent agents. We find that indirect democracy is often welfare maximizing.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Volume2008-040
Publication statusPublished - 2008

Publication series

NameTILEC Discussion Paper
Volume2008-040

Keywords

  • Imperfect information
  • beliefs
  • democracy
  • populism
  • accountability
  • experts

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