Unraveling Short- and Farsightedness in Politics

Hans Gersbach and Oriana Ponta ()
Additional contact information
Oriana Ponta: ETH Zurich, Switzerland

No 12/158, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: The absence of the deselection threat in incumbents’ last term in office can be negative or positive for society. Some politicians may reduce their efforts, while others may pursue beneficial long-term policies that may be unpopular in the short term. We propose a novel pension system that solves the effort problem while preserving willingness to implement long-term policies. The idea is to give politicians the option to choose between a flexible pension scheme and a fixed pension scheme. In a flexible pension scheme, the pension increases with short term performance as measured by the vote share of the officeholder’s party in the next election. This system increases social welfare by letting officeholders self-select into those activities that most benefit society. We analyze the properties and consequences of such a system and assess its robustness. Finally, we extend the pension system with choice to non-last-term situations and derive a general welfare result.

Keywords: elections; political contracts; vote-share thresholds; incumbents; selection; effort (search for similar items in EconPapers)
JEL-codes: D7 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-02
New Economics Papers: this item is included in nep-age, nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.cer.ethz.ch/content/dam/ethz/special-in ... papers/WP-12-158.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not found UA (http://www.cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-12-158.pdf [301 Moved Permanently]--> https://www.cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-12-158.pdf [301 Moved Permanently]--> https://cer.ethz.ch/content/dam/ethz/special-interest/mtec/cer-eth/cer-eth-dam/documents/working-papers/WP-12-158.pdf)

Related works:
Journal Article: Unraveling short- and farsightedness in politics (2017)
Working Paper: Unraveling Short- and Farsightedness in Politics (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:12-158

Access Statistics for this paper

More papers in CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich Contact information at EDIRC.
Bibliographic data for series maintained by ().