Moneycracy

Alessandro Fedele and Pierpaolo Giannoccolo

No BEMPS07, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: How do wage and other financial benefits affect the set of candidates for political office? We answer the question by studying self-selection into politics of individuals with heterogeneous skills and heterogeneous motivations. Our predictions are in line with the efficiency wage results proposed by the extant literature when a benchmark model is considered with skills as the sole characteristic of individuals. Welfare is increasing in the politicians’ wage since the best, i.e., high-skilled, individuals are attracted to politics only if remuneration covers their high opportunity costs. Our findings are remarkably different when also motivation is taken into account. Welfare is not likely to be maximum when the politicians’ wage is maximum for individuals are attracted whose motivation is well fitted with the market rather than the public sector. Finally, we provide an overview of the labor market of politicians in some Western countries and suggest that the Italian case might be representative of our inefficiency wage mechanism, which we call moneycracy.

Keywords: Keywords: Politicians’ remuneration; Skills; Motivation; Moneycracy (search for similar items in EconPapers)
JEL-codes: J24 J32 J45 P16 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-06
New Economics Papers: this item is included in nep-hrm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.unibz.it/bemps07.pdf (application/pdf)

Related works:
Working Paper: Moneycracy (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bzn:wpaper:bemps07

Access Statistics for this paper

More papers in BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen Contact information at EDIRC.
Bibliographic data for series maintained by F. Marta L. Di Lascio () and Alessandro Fedele ().