Electoral Transparency and Sequential Voter Rationality: A Dynamic Game-Theoretic Analysis of Implementing a Political Rating Agency

Conventional electoral theory posits that transparency enhances accountability by enabling voters tomake informed, rational decisions. However, empirical evidence from diverse national contextsreveals a persistent disconnect: the disclosure of corruption frequently fails to precipitate significantelectoral repercussions. This apparent paradox has led some scholars to posit voter irrationality. Thispaper challenges this interpretation, contending instead that the absence of electoral sanctions againstcorrupt politicians arises from the inherent complexities of strategic environments, characterized by information asymmetry and ambiguous signaling. We develop a formal model employing dynamicgame theory to analyze the strategic interactions between politicians and voters who update theirbeliefs through Bayesian learning. Our model demonstrates that electoral accountability emergesincrementally, contingent upon sequences of credible signals across multiple electoral cycles. Tomitigate the pervasive challenges of adverse selection and moral hazard, we propose theestablishment of an independent Political Rating Agency (PRA). This agency would furnish credible,standardized, and readily interpretable information.