Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2018

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The Perverse Politics of Polarization

S. Nageeb Ali, Maximilian Mihm, Lucas Siga*

Date: 2018-05-12 12:00 pm – 12:30 pm
Last modified: 2018-04-27

Abstract


Many policy choices involve gains for some voters at a cost borne by others. When an electorate is asked to select between these policies--either in the context of direct referenda or choosing between candidates whose positions on these policies differ---voters may be uncertain and not all that well-informed about who gains and suffers from these reforms. This paper studies the interplay of distributive politics and private information, and shows that it generates a strategic force of ``suspicion'': when an uninformed voter contemplates many other voters supporting a policy, she may conclude that she is likely to suffer from it. This force of suspicion induces voters to reject policies that are ex ante optimal and that would be selected with high probability were all information public. Our paper characterizes a form of ``negative correlation'' that is necessary and sufficient for this informational failure.

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