Abstract:

Empirical evidence suggests that a prime minister benefits from firing ministers who are involved in political scandals. We explore a model in which scandals are positively related to policy activism, so that a prime minister may wish to protect a minister from resignation calls. We find that protection can sometimes discourage activism: it enhances the value of a minister's career and hence encourages him to "sit tight" by moderating his activities. On the other hand, an exogenous increase i...

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