Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/260866 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9736
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The paper analyzes under what circumstances policymakers experiment with policies with uncertain outcomes, when they prefer to imitate policies initiated in other countries, and when they prefer to coordinate policies internationally. Policymakers have private costs of active policies and compete internationally in a yardstick competition which gives rise to a potential distortion between what citizens want and what policymakers do. I find that policymakers’ policies as well as regime choice deviate from what citizens want but that an increase in uncertainty about policy outcomes decreases this distortion.
Subjects: 
uncertainty
policy competition and coordination
yardstick competition
JEL: 
D78
F42
F59
Document Type: 
Working Paper
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