Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73382
Authors: 
Drometer, Marcus
Year of Publication: 
2006
Series/Report no.: 
BGPE Discussion Paper 8
Abstract: 
This paper introduces hyperbolic discounting into politics. In our model, politicians act according to the preferences of voters in order to be re-elected. As voters' preferences are dynamically inconsistent, the political process results in an allocation of the public budget that is distorted towards consumption ex- penditures. We show that this inefficiency is mitigated when the influence of bureaucrats who favour an excessive supply of public goods is taken into ac- count. Finally, we derive a positive relationship between the optimal level of a bureaucracy's influence and the relevance of long-term investments in a given policy area.
Subjects: 
Political Agency
Hyperbolic Discounting
Bureaucracy
JEL: 
D72
D73
H11
Document Type: 
Working Paper

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