Competitive Policy Development

Competitive Policy Development

By
Alexander V. Hirsch, Ken Shotts
American Economic Review.
2015, Vol. 105, Issue 4, Pages 1646-1664
We present a model of policy development in which competing factions have different ideologies, yet agree on certain common objectives. Policy developers can appeal to a decisionmaker by making productive investments to improve the quality of their proposals. These investments are specific to a given proposal, which means that policy developers can potentially obtain informal agenda power. Competition undermines this agenda power, forcing policy developers to craft policies that are better for the decisionmaker. This beneficial effect is strongest if policy developers have divergent ideological preferences, because their intense desire to affect policy motivates them to develop higher-quality proposals.