Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174006
Authors: 
Thomas, Tobias
Heß, Moritz
Wagner, Gert G.
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 11096
Abstract: 
As from a political economy perspective, politicians often fail to implement structural reforms, we investigate if the resistance to reform is based on the differences in the risk preferences of voters, politicians, and bureaucrats. Based on the empirical results of a survey of the population in Germany, 175 members of the Federal German Parliament (Bundestag), and 106 officials ("bureaucrats") from German ministries, this is not the case. Since both politicians and bureaucrats have a higher risk appetite than the general population, their risk preferences cannot be seen as an explanation for the resistance to structural reform. Hence, it must be caused by other reasons. These can be for instance – as public choice scholars argue – interventions by veto players, wars of attrition by powerful interest groups, or reform logjams initiated. However, another point of view could be that modern democracies are doing better than many believe. During times of populist campaigns, the election process can put forth candidates with very high risk appetites, but the constitutions of democracies turn out to be rather smart if hazardous actions and measures by political rookies and gamblers are inhibited by checks and balances.
Subjects: 
political reforms
political decision-making
principal agent-theory
risk aversion
German
SOEP
JEL: 
D71
D78
H11
H70
P16
Z13
Document Type: 
Working Paper

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