Polarization, Trust and Policy Capacity - Strategic Bureaucrat Appointments under Electoral Incentives

Abstract: Using a theoretical model, we investigate the determinants of states' policy capacity, defined as the ability of states to draft effective legislation. Our analysis reveals that the interaction between politicians' implementation decisions and bureaucrats' motivation to design socially beneficial policies can result in the coexistence of high-trust and low-trust equilibria. In the absence of electoral concerns, politicians favor high-trust equilibria, treating policy capacity as a public good, and thus prioritize ability and motivation in bureaucratic appointments. However, in a sufficiently polarized society, electoral concerns may prompt more policy-skeptical politicians to strategically appoint less able and motivated bureaucrats to diminish policy capacity and ensure low-trust equilibria. This strategy offers twofold benefits to policy-skeptical politicians: (1) it shifts future implementation decisions of more interventionist politicians in their favor, and (2) it reduces voters' demand for interventionist decision-making, thereby enhancing their electoral prospects. Joint paper with Otto Swank.