Re-Election Threshold Contracts in Politics

35 Pages Posted: 25 Aug 2005

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: August 2005

Abstract

When politicians are provided with insufficient incentives by the democratic election mechanism, social welfare can be improved by threshold contracts. A threshold contract stipulates the performance level that a politician must reach in order to obtain the right to stand for re-election. 'Read my lips' turns into 'read my contract'. Politicians can offer the threshold contracts during their campaign. These threshold contracts do not violate the liberal principle of free and anonymous elections in democracies.

Keywords: Elections, threshold contract, democracy

JEL Classification: D72, D82

Suggested Citation

Gersbach, Hans and Liessem, Verena, Re-Election Threshold Contracts in Politics (August 2005). CEPR Discussion Paper No. 5175. Available at SSRN: https://ssrn.com/abstract=790667

Hans Gersbach (Contact Author)

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

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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