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Carlo Prato, Ph.D.

Georgetown University, Washington D.C., USA

Authors: Carlo Prato and Stephane Wolton

Abstract: This paper studies how economic conditions affects the likelihood of reform. Using a novel theory of the electoral process where successful communication of candidates' platforms requires effort from both candidates and a representative voter, we show that candidates' platform choices depend critically on the voter's gain from reform. When her gain from reform is low, no candidate proposes policy change; when it is high, non-competent politicians run on harmful reformist platform. In line with empirical findings, our model rationalizes why reforms occur rarely in good and bad times and why crises can lead to delayed and botched reforms.

JEL Classification: D72, D78, D83.

Keywords: Crises, Reforms, Elections, Campaigns.

Full Text: “Crises and The Puzzle of Reforms”