Citation

Discussion Paper Details

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Full Details

Title: Competition of Politicians for Wages and Office

Author(s): Hans Gersbach

Publication Date: February 2004

Keyword(s): compensation, elections and wages, free riding, incentive contracts, politicians and underprovision

Programme Area(s): Public Economics

Abstract: We examine a model in which two politicians compete for office and for wages. Their remunerations are either set by the public or are offered competitively by the candidates during campaigns. Our main finding shows that competitive wage offers by candidates lead to lower social welfare than remunerations pre-determined by the public, since less competent candidates are elected or wage costs and tax distortions are higher.

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Bibliographic Reference

Gersbach, H. 2004. 'Competition of Politicians for Wages and Office'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4261