Abstract
The model of public policy studied in this paper has heterogeneous citizens/voters and two public goods: one (roads) chosen directly by an elected policy-maker, and the other (pollution) stochastically dependent on the amount of roads. Both a one-country and a two-country version of the model are analyzed; the latter displays externalities across the countries which create incentives for free riding and strategic delegation. The welfare effects of providing the policy-maker with information about the relationship between roads and pollution are investigated, and it is shown that more information hurts some - sometimes even all - citizens. In particular, the opportunity not to create an institution for information gathering can serve as a commitment device for a country, although with the unfortunate effect of making the overall outcome even worse. Implications for the welfare effects of 'informational lobbying' are also discussed.
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