Term Limits and Electoral Accountability

42 Pages Posted: 5 Apr 2004

See all articles by Michael Smart

Michael Smart

University of Toronto - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Daniel M. Sturm

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

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Date Written: February 2004

Abstract

This Paper analyses the impact of term limits in a political agency model. We find that term limits reduce the value of holding office. This reduction in the re-election incentive can induce politicians to implement policies that are closer to their own private preferences. Such 'truthful' behaviour by incumbents will in turn result in better screening of incumbents whose preferences do not correspond to voters' preferences. We show that these effects can make a two-term limit, which is the empirically most frequent restriction on tenure, ex ante welfare-improving from the perspective of voters. We present evidence from gubernatorial elections that the model's main empirical implication is supported by the data.

Keywords: Political agency, accountability, term limits

JEL Classification: D72, H11

Suggested Citation

Smart, Michael and Sturm, Daniel M., Term Limits and Electoral Accountability (February 2004). Available at SSRN: https://ssrn.com/abstract=519122

Michael Smart (Contact Author)

University of Toronto - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Daniel M. Sturm

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

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Germany
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+49 89 2180 6227 (Fax)

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