Rules transparency and political accountability

Rules of allocation and redistribution in the public sector are often less contingent on available information than normative theory would suggest. This paper offers a political economy explanation. Under different rules, even if the observable outcomes of policies remain the same, the informational content which can be extracted by these observations is different. Less contingent rules allow citizens to gain more information on politicians and this improved information may be used to better select politicians. This advantage may overcome the efficiency loss induced by flatter rules. (C) 2001 Elsevier Science B.V. All rights reserved.