Uncertain Policy Implementation with Public Information

Abstract

Politicians' policy proposals are often vetted by the media, academics, and non-partisan organizations. This paper explores the effects of this policy vetting, modeled as a public signal about the expected outcome of the policy, on a politician's incentive to implement the policies she proposes. In my model, the voter and the politician are uncertain about the competence of the politician and the suitability of her proposed policy. Because more competent politicians are more likely to propose good policies, the voter can use the policy signal to update her beliefs about the politician. This updating creates a perverse reputational incentive for the politician to implement her policy proposal if and only if its expected outcome is sufficiently low. When the results of vetting are shown only to the politician, she implements her policy only when its expected outcome is sufficiently high, because her policy information does not directly affect the voter's beliefs about her.