Suppose that a country currently does not allow its political leaders to be in office for more than one term. The country is considering moving from a policy of no reelection to allowing one reelection (i.e., two terms in office). Figure 22P-1 shows a governor's options while serving as governor. She can either act honestly or dishonestly. If she acts honestly, the voters will vote to reelect her. If she acts dishonestly, the voters will not vote for her reelection. Assume that the governor would prefer to be reelected. How will moving from a policy of no reelection to allowing one reelection affect the governor's honesty in her first (and potentially second) terms?

Figure 22P-1:

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Result Vote for reelection Reelection Act honestly Voters Governor Voters Act dishonestly No Vote against reelection reelection