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Politicians’ outside earnings and electoral competition

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Author Info
Becker, Johannes
Peichl, Andreas
Rincke, Johannes

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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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Paper provided by University of Cologne, CPE - Cologne Center for Public Economics in its series FiFo-CPE Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge with number 08-3.

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Date of creation: 2007
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Handle: RePEc:zbw:uoccpe:7220

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Related research
Keywords: Political competition outside earnings political rents

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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  1. 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. [Downloadable!] (restricted)
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  2. 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.
  3. Mattozzi, Andrea & Merlo, Antonio, 2007. "Political Careers or Career Politicians?," CEPR Discussion Papers 6164, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside income and moral hazard : the elusive quest for good politicians," Economics Working Papers we073218, Universidad Carlos III, Departamento de Economía. [Downloadable!]
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  5. 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). [Downloadable!]
  6. Caselli, Francesco & Morelli, Massimo, 2004. "Bad politicians," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 759-782, March. [Downloadable!] (restricted)
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  7. Timothy Besley, 2005. "Political Selection," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 43-60, Summer. [Downloadable!] (restricted)
  8. Panu Poutvaara & Tuomas Takalo, 2004. "Candidate Quality," Public Economics 0406009, EconWPA. [Downloadable!]
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  9. Myerson Roger B., 1993. "Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis," Games and Economic Behavior, Elsevier, vol. 5(1), pages 118-132, January. [Downloadable!] (restricted)
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  10. Messner, Matthias & Polborn, Mattias K., 2004. "Paying politicians," Journal of Public Economics, Elsevier, vol. 88(12), pages 2423-2445, December. [Downloadable!] (restricted)
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    • Matthias Messner & Mattias Polborn, . "Paying Politicians," Working Papers 246, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
  11. 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. [Downloadable!]
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