DP9005 Higher Bars for Incumbents and Experience

Author(s): Hans Gersbach, Markus Müller
Publication Date: June 2012
Keyword(s): elections, experience, incumbency advantage, political contracts, vote-share thresholds
JEL(s): D7, D82, H4
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9005

This paper analyzes optimal re-election bars when incumbents gain socially valuable experience in office. We develop a two-period model in which the output of a public good depends on an office-holder's effort, ability and experience. When campaigning for election to an open seat in the first period, candidates can make binding offers of the minimum share of the votes they must obtain to be re-elected in the second period, should they win in the first. We prove that, in equilibrium, both candidates offer the same vote-share threshold, that it exceeds 50 percent, and that it is socially optimal. The higher threshold increases the expected effort over both periods and tends to raise the expected level of ability of office-holders in the second. Together, these effects outweigh the expected loss of incumbents' acquired experience, which results from their reduced chances of getting re-elected with the higher bar. The socially optimal vote threshold is increasing in the value of experience. All of the above conclusions would hold if the optimal threshold were set instead by law.