Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance

56 Pages Posted: 23 May 2008

See all articles by Claudio Ferraz

Claudio Ferraz

University of California, Berkeley - Department of Agricultural & Resource Economics; Institute of Applied Economic Research (IPEA)

Frederico Finan

University of California, Berkeley - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Recent studies have emphasized the importance of the quality of politicians for good government and consequently economic performance. But if the quality of leadership matters, then understanding what motivates individuals to become politicians and perform competently in office becomes a central question. In this paper, we examine whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries'of local legislators across Brazil's municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population. Our main findings show that increases in salaries not only attracts more candidates, but more educated ones. Elected officials are in turn more educated and stay in office longer. Higher salaries also increase legislative productivity as measured by the number of bills submitted and approved, and the provision of public goods.

Keywords: politician salary, quality, political agency

JEL Classification: D72, D78, J33

Suggested Citation

Ferraz, Claudio and Finan, Frederico, Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance. , Vol. , pp. -, . Available at SSRN: https://ssrn.com/abstract=1136216 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Claudio Ferraz (Contact Author)

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

Institute of Applied Economic Research (IPEA) ( email )

Av. Presidente Antonio Carlos 51
16 andar, Castelo
RJ 20020-010 Rio de Janeiro
Brazil
+55 21 3804-8000 (Phone)
+55 21 2240-1920 (Fax)

Frederico Finan

University of California, Berkeley - Department of Economics ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
117
Abstract Views
964
rank
196,861
PlumX Metrics