Political Liability Insurance for Campaign Promises

Henrik Egbert ()
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Henrik Egbert: University of Applied Sciences Anhalt - Germany

Bulgarian Economic Papers from Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski

Abstract: In liberal democracies, the inability of voters to enforce campaign pledges represents an agency problem, as politicians can make non-binding promises during elections without incurring ex ante costs. This paper introduces an economic model of mandatory liability insurance for political campaign promises. Under this framework, candidates running for office must obtain liability insurance for at least one quantifiable policy target. Insurance companies screen candidates and assess risks, setting individualized premiums paid by the candidates that reflect candidate credibility, expertise, and policy feasibility. Insurance details are disclosed to the electorate, providing voters with additional information. After the election, an independent evaluation body determines whether the promised thresholds have been met. If a promise is not fulfilled, the insurer pays financial compensation into a public fund. Political liability insurance thus offers a potential solution to the problem of unenforceable campaign promises, promoting a more transparent and accountable electoral process.

Keywords: campaign promises; political liability insurance; political accountability; agency problem; contractual democracy (search for similar items in EconPapers)
JEL-codes: D72 D78 D82 G22 K16 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2026-10, Revised 2026-10
New Economics Papers: this item is included in nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:sko:wpaper:bep-2026-05

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