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Politicians' Outside Earnings and Electoral Competition

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  • Becker, Johannes
  • Peichl, Andreas
  • Rincke, Johannes

Abstract

This paper deals with the impact of electoral competition on politicians' outside earnings. We propose a simple theoretical model with politicians facing a tradeoff between allocating their time to political effort or to an alternative use generating outside earnings. The model has a testable implication stating that the amount of time spent on outside work is negatively related to the degree of electoral competition. We test this implication using a new dataset on outside earnings of members of the German federal assembly. Taking into account the potential endogeneity of measures of political competition that depend on past election outcomes, we find that politicians facing low competition have substantially higher outside earnings.

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File URL: http://epub.ub.uni-muenchen.de/2206/1/BeckerPeichlRincke_Munich_DP_08.pdf
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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 2206.

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Date of creation: 12 Mar 2008
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Handle: RePEc:lmu:muenec:2206

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Keywords: Outside earnings; Electoral competition;

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References

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  1. Caselli, Francesco & Morelli, Massimo, 2000. "Bad Politicians," CEPR Discussion Papers 2402, C.E.P.R. Discussion Papers.
  2. Torsten Persson & Guido Tabellini, . "The size and the scope of government: Comparative politics with rational politicians," Working Papers 137, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  3. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside Income and Moral Hazard: The Elusive Quest for Good Politicians," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-164, Boston University - Department of Economics.
  4. Poutvaara, Panu & Takalo, Tuomas, 2007. "Candidate quality," Munich Reprints in Economics 19785, University of Munich, Department of Economics.
  5. Andrea Mattozzi & Antonio Merlo, 2007. "Mediocracy," NBER Working Papers 12920, National Bureau of Economic Research, Inc.
  6. Gagliarducci, Stefano & Nannicini, Tommaso & Naticchioni, Paolo, 2008. "Electoral Rules and Politicians’ Behavior: A Micro Test," IZA Discussion Papers 3348, Institute for the Study of Labor (IZA).
  7. Messner, Matthias & Polborn, Mattias K., 2004. "Paying politicians," Journal of Public Economics, Elsevier, vol. 88(12), pages 2423-2445, December.
    • Matthias Messner & Mattias Polborn, 2003. "Paying Politicians," Working Papers 246, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  8. Mattozzi, Andrea & Merlo, Antonio, 2008. "Political careers or career politicians?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 597-608, April.
  9. Roger B. Myerson, 1991. "Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis," Discussion Papers 956, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Timothy Besley, 2005. "Political Selection," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 43-60, Summer.
  11. Bender, Bruce & Lott, John R, Jr, 1996. " Legislator Voting and Shirking: A Critical Review of the Literature," Public Choice, Springer, vol. 87(1-2), pages 67-100, April.
  12. Persson, Torsten & Tabellini, Guido, 1998. "The size and scope of government: Comparative politics with rational politicians," Seminar Papers 658, Stockholm University, Institute for International Economic Studies.
  13. Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002. "Electoral Systems And Public Spending," The Quarterly Journal of Economics, MIT Press, vol. 117(2), pages 609-657, May.
  14. Parker, Glenn R, 1992. " The Distribution of Honoraria Income in the U.S. Congress: Who Gets Rents in Legislatures and Why?," Public Choice, Springer, vol. 73(2), pages 167-81, March.
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Citations

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Cited by:
  1. 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.
  2. Fedele, Alessandro & Naticchioni, Paolo, 2013. "Moonlighting Politicians: Motivation Matters!," IZA Discussion Papers 7500, Institute for the Study of Labor (IZA).
  3. Naci Mocan & Duha T. Altindag, 2013. "Salaries and Work Effort: An Analysis of the European Union Parliamentarians," Auburn Economics Working Paper Series auwp2013-02, Department of Economics, Auburn University.
  4. Andreas Polk, 2011. "Lobbying: Private Interests and Public Conduct," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 9(1), pages 3-7, 05.
  5. Geys, Benny & Mause, Karsten, 2011. "Moonlighting politicians: A survey and research agenda," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-101, Social Science Research Center Berlin (WZB).
  6. Becker, Johannes & Peichl, Andreas & Rincke, Johannes, 2008. "Politicians' Outside Earnings and Political Competition," IZA Discussion Papers 3902, Institute for the Study of Labor (IZA).
  7. Kaisa Kotakorpi & Panu Poutvaara & Marko Terviö, 2013. "Returns to Office in National and Local Politics," CESifo Working Paper Series 4542, CESifo Group Munich.
  8. Thomas Braendle, 2013. "Do Institutions Affect Citizens' Selection into Politics?," Working papers 2013/04, Faculty of Business and Economics - University of Basel.
  9. Maria De Paola & Vincenzo Scoppa, 2010. "Political Competition And Politician Quality: Evidence From Italian Municipalities," Working Papers 201005, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  10. Benny Geys, 2013. "Election Cycles in MPs' Outside Interests? The UK House of Commons, 2005–2010," Political Studies, Political Studies Association, vol. 61(2), pages 462-472, 06.
  11. Libman, Alexander & Schultz, André & Graeber, Thomas, 2011. "Tax return as a political statement," Frankfurt School - Working Paper Series 169, Frankfurt School of Finance and Management.
  12. Felix Arnold, 2013. "German MPs' Outside Jobs and Their Repercussions on Parliamentary Effort," Discussion Papers of DIW Berlin 1340, DIW Berlin, German Institute for Economic Research.
  13. Thomas Braendle & Alois Stutzer, 2010. "Political Selection of Public Servants and Parliamentary Oversight," Working papers 2010/08, Faculty of Business and Economics - University of Basel.
  14. Bernecker, Andreas, 2013. "Do Politicians Shirk when Reelection Is Certain? Evidence from the German Parliament," Working Papers 13-09, University of Mannheim, Department of Economics.

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