Competition of Politicians for Wages and Office

Hans Gersbach

No 4261, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine a model in which two politicians compete for office and for wages. Their remunerations are either set by the public or are offered competitively by the candidates during campaigns. Our main finding shows that competitive wage offers by candidates lead to lower social welfare than remunerations pre-determined by the public, since less competent candidates are elected or wage costs and tax distortions are higher.

Keywords: Incentive contracts; Politicians; Compensation; Elections and wages; Free riding; Underprovision (search for similar items in EconPapers)
JEL-codes: D70 D80 (search for similar items in EconPapers)
Date: 2004-02
New Economics Papers: this item is included in nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Competition of politicians for wages and office (2009)
Journal Article: Competition of politicians for wages and office (2009)
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