Many policy reforms involve gains for some voters at a cost borne by others, and voters may be asymmetrically informed about who gains and loses. This paper shows that the interaction of distributive politics and asymmetric information generates an adverse selection effect: when an uninformed...

Asymmetric information plays an important role in markets and politics. When parties are asymmetrically informed and have misaligned preferences, they may be hurt by adverse selection. By contrast, if parties know that their preferences are aligned, they may benefit from advantageous selection....