Divided Committees and Distortionary Vagueness

(with Colin Krainin)

Delegating political authority is commonplace: voters delegate to politicians, politicians delegate to committees, and governments delegate to outside agencies. Scholars often study information transmission associated with delegation from the perspective of the principal and assume that the agent is honest, yet, agents sometimes distort the truth. In this paper, we show that delegating decision making to a committee, subcommittee, or agency with an agenda-setting chair reduces incentives for the members to be vague. We also find that when the committee chair and the median committee member have opposing preferences, the committee transmits more precise information. Using data from the U.S. central bank during the Burns' Era (1970-1978), we test this theory and indeed find evidence that FOMC language is more certain when the committee is divided rather than aligned.

DateAttached files
1 October 2019