Self-imposition of public oversight

We argue that policymakers may have personal interests in policy restraints channeled through public oversight. Self-imposition of public oversight can be beneficial for the policymaker because it may help alleviate the dynamic inconsistency problem that she otherwise faces. In the setting studied herein, self-imposed public oversight takes the form of a ceiling on tax rates, which can be overridden only with the legislature’s consent. Such a mechanism is shown to credibly commit the policymaker to future tax restraint, thus inducing larger productive effort.