Incentive Contracts and Elections for Politicians with Multi-Task Problems

Hans Gersbach and Verena Liessem

No 4075, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider a model with a politician facing a multi-task problem while in office. The re-election mechanism distorts the allocation of effort in favour of tasks whose outcomes can be measured more precisely than others. We show that a combination of elections and incentive contracts can alleviate this inefficiency. The incentive contract does not require information about the performance of the politician and is self-financing across terms.

Keywords: Elections; Incentive contracts; Multi-task problems (search for similar items in EconPapers)
JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
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Citations: View citations in EconPapers (6)

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Journal Article: Incentive contracts and elections for politicians with multi-task problems (2008)
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