Yardstick Competition among Governments

Accountability and Policymaking when Citizens Look Across Borders

Pierre Salmon

Broad overview of yardstick competition
Links yardstick competition to insights of political economy and principal-agent theory
Combines theoretical, methodological, and empirical findings

Yardstick Competition among Governments

Accountability and Policymaking when Citizens Look Across Borders

Pierre Salmon

Description

Measuring government effectiveness is essential to ensuring accountability, as is an informed public that is willing and able to hold elected officials and policy-makers accountable. There are various forms of measurement, including against prior experience or compared to some ideal.

In Yardstick Competition among Governments, Pierre Salmon argues that a more effective and insightful approach is to use common measures across a variety of countries, state, or other relevant political and economic districts. This facilitates and enables citizens comparing policy outputs in their own jurisdictions with those of others. An advantage of this approach is that it reduces information asymmetries between citizens and public officials, decreasing the costs of monitoring by the former of the latter -along the lines of principal-agent theory. These comparisons can have an effect on citizens' support to incumbents and, as a consequence, also on governments' decisions. By increasing transparency, comparisons by common yardsticks can decrease the influence of interest groups and increase the focus on broader concerns, whether economic growth or others. Salmon takes up complicating factors such as federalism and other forms of multi-level governance, where responsibility can become difficult to disentangle and accountability a challenge. Salmon also highlights the importance of publics with heterogeneous preferences, including variations in how voters interpret their roles, functions, or tasks. This results in the coexistence within the same electorate of different types of voting behavior, not all of them forward-looking. In turn, when incumbents face such heterogeneity, they can treat the response to their decisions as an aggregate non-strategic relation between comparative performance and expected electoral support.

Combining theoretical, methodological, and empirical research, Salmon demonstrates how yardstick competition among governments, a consequence of the possibility that citizens look across borders, is a very significant, systemic dimension of governance both at the local and at the national levels.

Yardstick Competition among Governments

Accountability and Policymaking when Citizens Look Across Borders

Pierre Salmon

Acknowledgements
Chapter 1: Introduction
Chapter 2: A characterization of political yardstick competition
2.1. Electoral agency
2.1.1. From 'normal' agency to 'political agency'
2.1.2. From 'political agency' to 'electoral agency'
2.1.3. Voters and performance: the principle
2.1.4. Ambiguities in the meaning of governmental performance
2.1.5. Conflicting views among voters
2.1.6. Incumbents and performance
2.2. Yardstick competition in electoral agency
2.2.1 Voters' comparative assessments
2.2.2 The comparisons-based support function
2.2.3. The S-shaped response of voters to comparative performance
2.2.4. Explained variable
2.2.5. Selection and incentives
2.3. Conclusion
Chapter 3: Accountability, information, and yardstick competition
3.1. Accountability
3.1.1 Definitions
3.1.2 Accountability and other dimensions of elections
3.1.3 Is accountability asymmetric?
3.1.4 Elites
3.1.5 Clientelism
3.1.6 Accountability and other ingredients of good governance
3.2. Information asymmetry as an obstacle to downward accountability
3.2.1. Biased information on general policy issues
3.2.2. Biased information on citizens' special interests
3.2.3. Obstacles to assessments of outcomes
3. 3. Yardstick competition to the rescue of accountability
3.3.1. Tournaments and yardstick competition in their original habitat
3.3.2. Transposition
3.3.3. Mimicking versus outperforming
3.4. Conclusion
Chapter 4: Yardstick competition and its cousins
4.1. Mobility-based competition
4.1.1. Policy-induced mobility and mobility-based competition
4.1.2. Compared strengths of the two competition mechanisms
4.1.3. The locus of interaction
4.1.4. Immobile citizens and mobility
4.1.5. Policymaking autonomy
4.1.6. The exit-voice nexus
4.1.7. Mobility-induced diversity and comparability
4.2. Policy learning
4.2.1. The pure case: comparisons by incumbents
4.2.2. On the relation between policy learning and yardstick competition
4.3. Other mechanisms
4.3.1. Peer approval and emulation
4.3.2. Out-of-jurisdiction public opinion
4.3.3. Incumbents' career concerns
4.3.4. Neo-Austrian institutional competition
4.4. Conclusion
Chapter 5: The virtue of narrowing: the fiscal federalism setting
5.1. Yardstick competition as a systemic dimension
5.2. Yardstick competition as an empirical fact
5.2.1. Strategic spatial interaction
5.2.2. Identifying yardstick competition
5.2.3. Neighborhood
5.2.4. Other issues addressed within the internal discussion
5.3. Queries
5.3.1. Status of the empirical results
5.3.2. Beyond neighborhood
5.3.3. Empirical implications of non-linearity
5.3.4. Alternative approaches
5.4. Conclusion
Chapter 6: The challenge of extending: the international setting
6.1. Circumstantial evidence
6.2. Obstacles
6.2.1. Ideological obstacles
6.2.2. Sociological obstacles
6.2.3. Technical obstacles
6.3. The few empirical results obtained so far
6.4. Dealing with complexity and diversity
6.5. Conclusion
Chapter 7: Two heuristic models
7.1 First model: yardstick competition and the allocation of effort
7.1.1. The framework
7.1.2. Differential information asymmetry
7.1.3. Constitutional remedies
7.1.4. Empirical predictions
7.1.5. Yardstick competition and international political relations
7.2. Second model: the impact of comparative underperformance
7.2.1. The framework
7.2.2. Discussion
7.2.3. A check-list of reasons for ineffectiveness
7.3. Conclusion
Chapter 8: Vertical interactions
8.1. Horizontal yardstick competition in multilevel settings
8.1.1. Shared responsibility for outcomes
8.1.2. Split principals
8.2. Vertical competition among governments
8.2.1. Competition for what? Three approaches
8.2.2. Breton's theory of vertical competition
8.2.3. The protection of vertical competition in unitary states
8.3. The EU context
8.3.1. Vertical relationships: the centralization process
8.3.2. Horizontal yardstick competition in the EU context
8.4. Conclusion
Chapter 9. Final comments: perverse effects, advice, and arguments
9.1. Perverse effects
9.1.1. Incompetent voters
9.1.2. Incumbents' incentives
9.2. Advice (or the absence thereof)
9.3. A methodological epilogue
9.3.1. Models
9.3.2. Mechanisms
9.3.3. Arguments
9.4. Conclusion
References

Yardstick Competition among Governments

Accountability and Policymaking when Citizens Look Across Borders

Pierre Salmon

Author Information

Pierre Salmon, Emeritus Professor, Laboratoire d'Economie de Dijon, University of Burgundy and National Center for Scientific Research, France

Pierre Salmon is Professor, Emeritus, at the Université de Bourgogne-Franche Comté. He has also been professor of economics at the European University Institute and is past-president of the European Public Choice Society. He is the author of "Decentralisation as an Incentive Scheme", a seminal article on yardstick competition among governments.

Yardstick Competition among Governments

Accountability and Policymaking when Citizens Look Across Borders

Pierre Salmon

Reviews and Awards

"Pierre Salmon is the father of yardstick competition. In this book he elaborates how competition by comparison is important for the working of political systems. The result is a better understanding of government that captures heterogeneity and uncertainty of political leadership well worth contemplating." - Jørn Rattsø, Professor of Economics, Norwegian University of Science and Technology

"Political competition is usually regarded as an entirely domestic affair. Salmon shows that it can also play an important and beneficial role between the governments of different countries because the comparison of their performances informs voters and improves democratic control. Salmon's monumental study will become the locus classicus for understanding yardstick competition." - Roland Vaubel, Professor Emeritus of Economics, Universitaet Mannheim

"Pierre Salmon invented the field of yardstick competition by asking what happens to politics when citizens look beyond their borders to form opinions about the quality of their government. In this authoritative book, Salmon critically reviews the literature and offers important insights on how to extend the analysis. A compulsory reading for anyone interested in understanding how politics work in a world that becomes more and more connected every day." - Massimo Bordignon, Professor of Economics, Catholic University of Milano

"Pierre Salmon is a pioneer in the study of what we now know as yardstick competition, a key dimension of political competition that beforehand was largely ignored in public economics and political economy. Yardstick Competition among Governments consolidates and extends his thinking on this important topic. Anyone interested in understanding why governments do what they do will profit from reading this fine book."-Stanley L. Winer, Canada Research Chair Professor, Carleton University, Ottawa"

"With his idea on yardstick competition, Pierre Salmon has revolutionized our thinking about competition between jurisdictions. Before, fiscal competition was supposed to be driven by migration of firms or citizens. Pierre has managed to make us focus on the political process as part of this competition." - Lars P. Feld, Professor of Economics at the University of Freiburg and Director of the Walter Eucken Institute

"The concept of yardstick competition owes much to Pierre Salmon. This volume carefully assesses the conditions under which "yardstick competition" fails to apply in the context of local finance. It also extends the method to cross-border issues, including competition within and across trading blocks, such as the EU. This is an indispensable book for those with an interest in contemporary public policy issues." - Ehtisham Ahmad, LSE and Zhejiang University

"14/01/2019"