Multitasking, limited liability and political agency

John William Hatfield and Gerard Padro i Miquel

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper considers a political accountability framework in which the politician exerts unobserved e¤ort in two independent dimensions. Since the worst payo¤ to the politician is removal from o¢ ce, this contracting environment exhibits limited liability. We show that limited liability implies that it is di¢ cult to implement vectors that devote attention to both dimensions. Hence citizens must decide between a high e¤ort allocation to a single task or a low total e¤ort allocation split between the two tasks. Given this, we consider why we do not observe more direct elections of separate ministers, which would allow for better balanced allocations of e¤ort. We …nd that if elections are primarily used as devices to weed out low type politicians, a united executive dominates one with divided accountability. These results give support to the view that elections act chie‡y as selection devices.

JEL-codes: D72 D86 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2006-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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