Political Accountability under Special Interest Politics

Democratic elections are often argued to both allow the aggregation of information and preferences of heterogenous voters and to provide an effective means of holding politicians accountable. This paper studies how heterogeneity of voter preferences affects political accountability. I introduce a common agency model, with voters as principals and the politician as the agent, and multiple policy dimensions. I characterize the equilibria in this model and identify several new effects resulting from the heterogeneity in voters' preferences. First, there is a non-monotonic effect of transparency on political accountability, in the sense that greater precision of information on the politician's performance first increases effectiveness of electoral controls, but then discourages the politician's effort. With very limited transparency, voters are unable to provide incentives to the politician. However, if information is too precise, the politician can target a narrow group of voters while strategically ignoring the rest. Second, the model also implies that small groups may be more successful in inducing politicians to choose policies in line with their preferences and provides a novel mechanism for the underprovision of public goods, whereby voters who equally care about a public good may nonetheless fail to induce the politician to provide it. Finally, conditions, under which delegation of voting makes the politician more accountable, are identified.