| Summary: | Political economy studies the role that incentives faced my political actors play in shaping political phenomena. This thesis explores the mechanisms behind as well as the consequences of the strategic behavior of politicians. In the first chapter, I show evidence that politicians enjoy and utilize an electoral advantage only from holding the office they are running for. Many reasons may explain extraordinary success to win reelections -e.g. elections select good candidates to begin with- thus isolating the exclusive effect of incumbency requires a careful research design which I perform in parliamentary elections in Chile. In the second chapter, I study how interest groups can influence policy makers through the public provision of information. The organization of protests and the commission of scientific studies fall in this category. I set up a game theory model of persuasion and accountability in order to incorporate the strategic information transmission aspect as well as the electoral and ideology incentives faced by the politician. I provide results that suggest welfare consequences of these activities as well as what would be the voters' optimal choice of politician to delegate policy making power to. In the third chapter, I ask whether political discourse can ever provide voters with useful information. Since lying has usually no direct cost to a politician, our initial intuition is that discourse should never provide information to voters, and nevertheless it seems to do in reality. In this chapter, I prove that when there exists a positive probability that a lie can be detected -e.g. a politician contradicts himself-, large amounts of information can always be transmitted. Formally, I characterize all informative equilibria of a cheap talk model with lie detectability and provide analysis.
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