Abstract
AbstractThis paper studies how voters’ selective ignorance interacts with policy design by political candidates. It shows that the selectivity empowers voters with extreme preferences and small groups, that divisive issues attract most attention, and that public goods are underfunded. Finer granularity of information increases these inefficiencies. Rational inattention can also explain why competing opportunistic candidates do not always converge on the same policy issues.
Highlights
Voters are typically very poorly informed about public policies
We study a theoretical model in which voters optimally choose how to allocate costly attention, and politicians take this into account in setting policies
The attention strategies are optimal for each voter, given their prior beliefs about policies, and policy vectors maximize the probability of winning for each candidate, given the voters’ attention strategies
Summary
Voters are typically very poorly informed about public policies. This is a well known fact, documented by extensive research in political science Voters pay more attention to the policy instruments that are more important to them, neglecting those instruments where policy deviations are expected to have only marginal effects This implies that equilibrium public goods that provide benefits to all are under-provided, and general tax distortions affecting everyone are too high, while there is an excessive amount of targeted redistribution (through tax credits or transfers) that only benefits specific groups. A closely related contribution is the interesting paper by Gavazza and Lizzeri (2009) on electoral competition with partially uninformed voters They show that specific patterns of information asymmetries give rise to intertemporal distortions, to under-provision of public goods, and to ”churning” (i.e. the same groups receive targeted transfers and pay general taxes, so that net transfers are smaller than gross transfers).
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