Re-Election Threshold Contracts in Politics
35 Pages Posted: 25 Aug 2005
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: Suggested Citation
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
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