Secretive vs. Transparent Committees and the Group Reputation Effect

In this paper I analyse the effect of transparency of the decision making process in committees on the decisions that are eventually taken. I focus on committees whose members are motivated by career concerns, so that each member tries to enhance his own reputation. When the decision making process is secretive, the individual votes of the committee members are not exposed to the public but only the final decision. Thus, individuals are evaluated according to the group’s decision. I find that in such a case, a group reputation effect arises, which induces group members to comply with preexisting biases. For example, if the voting rule demands a supermajority to accept a reform, individuals vote more often against reforms and exacerbate the conservatism of the voting rule. When the decision making process becomes transparent and individual votes are observed, this effect disappears and such committees are then more likely to accept reforms. Department of Economics, London School of Economics. Email: [email protected]