DP4664 Do Elections Always Motivate Incumbents? Learning versus Re-election Concerns

Author(s):	Eric Le Borgne, Ben Lockwood
Publication Date:	October 2004
Keyword(s):	career concerns, citizen-candidate, effort, elections, incomplete information, learning
JEL(s):	D72, D78, H41, J44, J45
Programme Areas:	Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=4664

This Paper studies a principal-agent model of the relationship between officeholder and an electorate, where everyone is initially uninformed about the officeholder?s ability. If office-holder effort and ability interact in the determination of performance in office, then an office-holder has an incentive to learn, i.e., raise effort so that performance becomes a more accurate signal of their ability. Elections reduce the learning effect, and the reduction in this effect may more than offset the positive ?re-election concerns? effect of elections on effort, implying higher effort with appointment. When this occurs, appointment of officials may welfare-dominate elections.