Do Elections Always Motivate Incumbents? Experimentation vs. Career Concerns
32 Pages Posted: 28 Jan 2006
Date Written: March 2003
This paper studies a principal-agent model of the relationship between an incumbent officeholder and the electorate, where the officeholder is initially uninformed about her ability. If officeholder effort and ability interact in the production function that determines performance in office, then an officeholder has an incentive to experiment - that is, raise effort so that performance becomes a more accurate signal of her ability. Elections reduce the experimentation effect, and the reduction in this effect may more than offset the positive career-concerns effect of elections on effort. Moreover, when this occurs, appointment of officeholders may Pareto-dominate elections.
Keywords: Career Concern, Elections, Citizen Candidate, Experimentation, Tournaments, Political Business Cycles
JEL Classification: D72, D78, H41, J44, J45
Suggested Citation: Suggested Citation