Competitive Policy Development
We present a model of policy development in which competing factions have different ideologies, yet agree on certain common objectives. Policy developers can appeal to a decision maker by making productive investments to improve the quality of their proposals. These investments are specific to a given proposal, which means that policy developers can potentially obtain informal agenda power. Competition undermines this agenda power, forcing policy developers to craft policies that are better for the decision maker. This beneficial effect is strongest if policy developers have divergent ideological preferences, because their intense desire to affect policy motivates them to develop higher quality proposals.
© 2015 American Economic Association. We thank Scott Ashworth, Roland Bénabou, Alex Debs, Jon Eguia, John de Figuieriedo, Catherine Hafer, Dan Kovenock, Adam Meirowitz, Christopher Stanton, and seminar audiences at Caltech, UC Irvine, Yale, the Institute for Advanced Study (Princeton), the 2013 Princeton Conference on Political Institutions and Economic Policy, the 2013 Wallis Conference on Political Economy, and the 2014 Priorat Workshop in Formal Political Science for helpful comments. We are also indebted to the editor and three anonymous referees for detailed comments and criticisms that dramatically improved both the presentation and substance of this paper. Part of Alexander Hirsch's research on this project was completed during a sabbatical at the Institute for Advanced Study (Princeton) that was partially financed by Princeton University and the Woodrow Wilson School of Public and International Affairs. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper.
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