Elections and Deceptions

How do democratic elections affect policy making? Traditionally, the virtue of elections has been seen in their role as means of screening and sanctioning shirking public officials. This paper proposes a novel rationale for elections and political campaigns considering that candidates incur psychological costs of lying. These non-pecuniary costs imply that political campaigns constitute an anchor and guide subsequent behavior, even in the absence of reputational or image concerns. Our lab experiments reveal that promises are more than cheap talk. They influence the behavior of both voters and their representatives. Strikingly, the electorate is better off when their leaders are elected democratically rather than being appointed exogenously. In addition, we find that representatives are more likely to serve the public interest when their approval rates are high. Taken together, our results suggest that electoral competition and campaigns confer important benefits beyond their screening and sanctioning functions.