Competition of Politicians for Wages and Office
AbstractWe 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 InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4261.
Date of creation: Feb 2004
Date of revision:
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Other versions of this item:
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-29 (All new papers)
- NEP-MIC-2004-02-29 (Microeconomics)
- NEP-POL-2004-02-29 (Positive Political Economics)
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