Competition of Politicians for Wages and Office

University of Heidelberg Economics Discusssion Paper No. 399

24 Pages Posted: 31 Jan 2004

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)

Multiple version iconThere are 2 versions of this paper

Date Written: November 2003

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 predetermined by the public, since less competent candidates are elected or wage costs are higher.

Keywords: Competitive wage offers, remunerations of politicians, elections, free riding and underprovision, incentive contracts

JEL Classification: D70, D80

Suggested Citation

Gersbach, Hans, Competition of Politicians for Wages and Office (November 2003). University of Heidelberg Economics Discusssion Paper No. 399. Available at SSRN: https://ssrn.com/abstract=491042 or http://dx.doi.org/10.2139/ssrn.491042

Hans Gersbach (Contact Author)

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

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Zurich, 8092
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IZA Institute of Labor Economics

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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

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