IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id4979.html
   My bibliography  Save this paper

Private Returns to Public Office

Author

Listed:
  • Raymond Fisman
  • Florian Schulz
  • Vikrant Vig

Abstract

The wealth accumulation of Indian parliamentarians using public disclosures required of all candidates since 2003 are studied. Annual asset growth of winners is on average 3 to 6 percentage points higher than runners-up. By performing a within-constituency com- parison where both runner-up and winner run in consecutive elections, and by looking at the subsample of very close elections, a range of alternative explanations for differential earnings of politicians and a relevant control group are ruled out. The “winner's premium" comes from parliamentarians holding positions in the Council of Ministers, with asset re- turns 13 to 29 percentage points higher than non-winners. The benefit of winning is also concentrated among incumbents, because of low asset growth for incumbent non-winners. [BREAD Working paper]. URL:[http://ipl.econ.duke.edu/bread/papers/working/344.pdf].

Suggested Citation

  • Raymond Fisman & Florian Schulz & Vikrant Vig, 2012. "Private Returns to Public Office," Working Papers id:4979, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:4979
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=A201251810578_20.pdf&fcategory=Articles&AId=4979&fref=repec
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    2. Timothy Besley, 2004. "Joseph Schumpeter Lecture: Paying Politicians: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 193-215, 04/05.
    3. Daniel Diermeier & Michael Keane & Antonio Merlo, 2005. "A Political Economy Model of Congressional Careers," American Economic Review, American Economic Association, vol. 95(1), pages 347-373, March.
    4. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    5. Benjamin A. Olken & Rohini Pande, 2012. "Corruption in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 479-509, July.
    6. Mattozzi, Andrea & Merlo, Antonio, 2008. "Political careers or career politicians?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 597-608, April.
    7. Serguey Braguinsky & Sergey Mityakov & Andrey Liscovich, 2014. "Direct Estimation of Hidden Earnings: Evidence from Russian Administrative Data," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 281-319.
    8. Kotakorpi, Kaisa & Poutvaara, Panu, 2011. "Pay for politicians and candidate selection: An empirical analysis," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 877-885, August.
    9. Raymond Fisman & Nikolaj A. Harmon & Emir Kamenica & Inger Munk, 2015. "Labor Supply Of Politicians," Journal of the European Economic Association, European Economic Association, vol. 13(5), pages 871-905, October.
    10. Ziobrowski Alan J & Boyd James W & Cheng Ping & Ziobrowski Brigitte J., 2011. "Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives," Business and Politics, De Gruyter, vol. 13(1), pages 1-24, April.
    11. Caselli, Francesco & Morelli, Massimo, 2004. "Bad politicians," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 759-782, March.
    12. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    13. John DiNardo & David S. Lee, 2004. "Economic Impacts of Unionization on Private Sector Employers: 1984-2001," NBER Working Papers 10598, National Bureau of Economic Research, Inc.
    14. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    15. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    16. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
    17. Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
    18. Ziobrowski, Alan J. & Boyd, James W. & Cheng, Ping & Ziobrowski, Brigitte J., 2011. "Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives," Business and Politics, Cambridge University Press, vol. 13(1), pages 1-22, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Braendle, Thomas, 2013. "Do Institutions Affect Citizens' Selection into Politics?," Working papers 2013/04, Faculty of Business and Economics - University of Basel.
    2. Ferraz, Claudio & Finan, Frederico S., 2008. "Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance," IZA Discussion Papers 3411, Institute of Labor Economics (IZA).
    3. Mattozzi, Andrea & Merlo, Antonio, 2008. "Political careers or career politicians?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 597-608, April.
    4. Mitchell Hoffman & Elizabeth Lyons, 2020. "A time to make laws and a time to fundraise? On the relation between salaries and time use for state politicians," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 1318-1358, August.
    5. Duha T. Altindag & Elif S. Filiz & Erdal Tekin, 2020. "Does It Matter How and How Much Politicians are Paid?," Economica, London School of Economics and Political Science, vol. 87(348), pages 1105-1132, October.
    6. Palguta, Ján & Pertold, Filip, 2021. "Political salaries, electoral selection and the incumbency advantage: Evidence from a wage reform," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 1020-1047.
    7. Thomas Braendle & Alois Stutzer, 2017. "Voters and Representatives: How Should Representatives Be Selected?," CREMA Working Paper Series 2017-05, Center for Research in Economics, Management and the Arts (CREMA).
    8. Mattozzi, Andrea & Merlo, Antonio, 2015. "Mediocracy," Journal of Public Economics, Elsevier, vol. 130(C), pages 32-44.
    9. Kaisa Kotakorpi & Panu Poutvaara & Marko Tervio, 2013. "Returns to office in national and local politics," Discussion Papers 86, Aboa Centre for Economics.
    10. Andreas Peichl & Nico Pestel & Sebastian Siegloch, 2013. "The politicians’ wage gap: insights from German members of parliament," Public Choice, Springer, vol. 156(3), pages 653-676, September.
    11. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
    12. Gavoille, Nicolas, 2018. "Who are the ‘ghost’ MPs? Evidence from the French parliament," European Journal of Political Economy, Elsevier, vol. 53(C), pages 134-148.
    13. Heléne Lundqvist, 2013. "Is it worth it? On the returns to holding political office," Working Papers 2013/14, Institut d'Economia de Barcelona (IEB).
    14. Auerbach, Jan, 2022. "Productive Office and Political Elitism," MPRA Paper 114582, University Library of Munich, Germany.
    15. Gavoille, Nicolas, 2018. "Who are the ‘ghost’ MPs? Evidence from the French parliament," European Journal of Political Economy, Elsevier, vol. 53(C), pages 134-148.
    16. Stefano Gagliarducci & Tommaso Nannicini, 2013. "Do Better Paid Politicians Perform Better? Disentangling Incentives From Selection," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 369-398, April.
    17. Björn Kauder & Manuela Krause & Niklas Potrafke, 2018. "Electoral cycles in MPs’ salaries: evidence from the German states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 981-1000, August.
    18. Pique, Ricardo, 2019. "Higher pay, worse outcomes? The impact of mayoral wages on local government quality in Peru," Journal of Public Economics, Elsevier, vol. 173(C), pages 1-20.
    19. Heléne Berg, 2018. "Politicians' Payments in a Proportional Party System," CESifo Working Paper Series 7278, CESifo.
    20. Klaas Beniers & Robert Dur, 2007. "Politicians’ motivation, political culture, and electoral competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(1), pages 29-54, February.

    More about this item

    Keywords

    Private Returns; Public Office; Information disclosure; Indian politics; Regression discontinuity; Annual asset growth; Indian parliamentarians; asset growth; candidates; salary earnings; politicians' motivations;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:4979. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.