Survey_MS_2012

Abstract

We study a signaling game in which an incumbent chooses whether to disclose public spending to win re-election. In the first period he has to decide whether to introduce the transparency policy that would reduce political recents, broadly defined as extra benefits or corruption. If he introduces the policy, public spending is disclosed at the beginning of the following period. In the second period, after observing the incumbent´s policy choice, each voter casts her vote for either the incumbent or the challenger based on all available information.