Signaling Competence Through Policy Revision

Abstract

What strategic considerations incentivize political parties to alter or replace policies passed by their political opponents? I provide an answer to this question by studying a model in which a political party attempts to convey competence---the quality of their noisy signal about a payoff-relevant state---through their decision whether to revise a policy passed by their opponent. First, I show that when a representative voter wants to elect a competent party, the party's decision to revise their opponent’s policy conveys competence while the decision to retain the opponent’s policy conveys incompetence. Then, I show that reelection incentives push the party to revise their opponent’s policy more frequently and with more extreme policies than they would without reelection concerns.