Reelection Threshold Contracts in Politics
33 Pages Posted: 15 Jan 2002
Date Written: January 2004
When politicians are provided with insufficient incentives by the democratic election mechanism, we show that social welfare can be improved by threshold contracts. A threshold incentive contract stipulates a performance level which a politician must reach in order to have the right to stand for reelection. Read my lips would turn into read my contracts. Reelection thresholds can be offered by politicians during campaigns and do not impair the liberal principle of free and anonymous elections in democracies.
Keywords: Elections, Incentive Contracts, Democracy
JEL Classification: D72, D82
Suggested Citation: Suggested Citation