DP11331 A Structural Model of Electoral Accountability

Author(s): Boragan Aruoba, Allan Drazen, Razvan Vlaicu
Publication Date: June 2016
Keyword(s): discipline, elections, maximum likelihood, political agency, selection, structural estimation
JEL(s): C57, D72, D73, H70
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11331

This paper proposes a structural approach to measuring the effects of electoral accountability. We estimate a political agency model with imperfect information in order to identify and quantify discipline and selection effects, using data on U.S. governors. We find that the possibility of reelection provides a significant incentive for incumbents to exert effort, that is, a disciplining effect. We also find a positive but weaker selection effect. According to our model, the widely-used two-term regime improves voter welfare by 4:2% compared to a one-term regime. JEL