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 Research; 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 Research ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Verena Liessem

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

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