Public trust and government betrayal

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52 Scopus citations

Abstract

This study presents a simple model of government reputation (in which government type cannot be directly observed by households) with the variation that government type, rather than being permanent, follows an exogenous Markov process. This formulation captures three characteristics of bad policy outcomes: governments which betray public trust do so erratically, public trust is regained only gradually after a betrayal, and governments with recent betrayals betray with higher probability than other governments.

Original languageEnglish (US)
Pages (from-to)27-43
Number of pages17
JournalJournal of Economic Theory
Volume130
Issue number1
DOIs
StatePublished - Sep 2006

Keywords

  • Government reputation

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