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Title: Incentive Contracts and Elections for Politicians with Multi-Task Problems

Author(s): Hans Gersbach and Verena Liessem

Publication Date: October 2003

Keyword(s): elections, incentive contracts and multi-task problems

Programme Area(s): Public Economics

Abstract: We consider a model with a politician facing a multi-task problem while in office. The re-election mechanism distorts the allocation of effort in favour of tasks whose outcomes can be measured more precisely than others. We show that a combination of elections and incentive contracts can alleviate this inefficiency. The incentive contract does not require information about the performance of the politician and is self-financing across terms.

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Bibliographic Reference

Gersbach, H and Liessem, V. 2003. 'Incentive Contracts and Elections for Politicians with Multi-Task Problems'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4075