Set them (almost) free: Discretion in electoral campaigns under incomplete information

The paper analyzes a model of electoral campaigning as a problem of competitive delegation. We consider an environment characterized by two sources of uncertainty: uncertainty on the nature of the optimal policy and uncertainty on the candidates’ biases. While voters know whether the candidate is left- or right-wing, they don’t know the extent of the bias. In this environment discretion may benefit voters as it allows the elected politician to adjust his policies to the state of the world. The paper shows that the optimal set of promises must be a closed interval, whose size is decreasing in the expected bias of the candidate. An example where the set of types is finite shows that an increase in the variability of candidates’ types may either increase or decrease the voters’ willingness to grant discretion to politicians.