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Is it worth it? On the returns to holding political office

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  • Heléne Lundqvist

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    (Stockholm University)

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    Abstract

    Despite the key role played by political payoffs in theory, very little is known empirically about the types of payoffs that motivate politicians. The purpose of this paper is to bring some light into this. I estimate causal effects of being elected in a local election on monetary returns. The claim for causality, I argue, can be made thanks to a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party, but ultimately did not. This research design is made possible thanks to a comprehensive, detailed data set covering all Swedish politicians who have run for office in the period 1991{2006. I establish that monetary returns are absent both in the short and long run. In stead, politicians seem to be motivated by non-monetary returns, and I show that being elected locally once (for exogenous reasons) can be an effective starting point for enjoying such payoffs.

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    Bibliographic Info

    Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2013/14.

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    Length: 58 pages
    Date of creation: 2013
    Date of revision:
    Handle: RePEc:ieb:wpaper:2013/6/doc2013-14

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    Keywords: Returns to politics; political career concerns; regression discontinuity design;

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    1. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs in Economics," NBER Working Papers 14723, National Bureau of Economic Research, Inc.
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    14. Ferraz, Claudio & Finan, Frederico S., 2008. "Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance," IZA Discussion Papers 3411, Institute for the Study of Labor (IZA).
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    18. Olle Folke, 2010. "Shades of brown and green: Party effects in proportional election systems," Working Papers 2010/25, Institut d'Economia de Barcelona (IEB).
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