@techreport{Rincke2005Yardstick,
abstract = {A simple model of yardstick competition between jurisdictions is presented.
Governments of jurisdictions face the alternative to choose between an old
and a new policy with stochastic payoffs. The new policy is superior to the
old policy in one state of the world, and inferior in the other. Governments
are either benevolent, serving the interest of the voter, or rent-seeking. An
equilibrium with yardstick competition is shown to exist where bad governments having a good government in their neighborhood choose the new policy more often compared to an equilibrium without relative performance evaluation. Overall, the probability of policy innovations is increased by yardstick
competition. The model has a testable empirical implication saying that policy innovations should show spatial correlation.},
address = {Mannheim},
author = {Johannes Rincke},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {330; Yardstick Competition; Public Choice},
language = {eng},
number = {05-11},
publisher = {Zentrum f\"{u}r Europ\"{a}ische Wirtschaftsforschung (ZEW)},
title = {Yardstick Competition and Policy Innovation},
type = {ZEW Discussion Papers},
url = {http://hdl.handle.net/10419/24104},
year = {2005}
}
