Reelection Threshold Contracts in Politics

33 Pages Posted: 15 Jan 2002

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Verena Liessem

Heidelberg University - Faculty of Economics and Social Studies

Date Written: January 2004

Abstract

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

Gersbach, Hans and Liessem, Verena, Reelection Threshold Contracts in Politics (January 2004). CESifo Working Paper Series No. 622. Available at SSRN: https://ssrn.com/abstract=296129

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

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

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Verena Liessem (Contact Author)

Heidelberg University - Faculty of Economics and Social Studies ( email )

Grabengasse 14
Heidelberg, D-69117
Germany
+49-6221-543172 (Phone)
+49-6221-543578 (Fax)

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