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Paying Politicians: Not Too Little, Not Too Much

Author

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  • Alessandro Fedele
  • Pierpaolo Giannoccolo

Abstract

How does pay affect the quality of politicians? This paper addresses the question by considering a three‐period citizen candidate model where potential candidates vary in skills and in public service motivation. First, potential candidates observe the level of pay in politics and simultaneously decide whether or not to run for office. Second, an election takes place and only one candidate is elected. Finally, the successful candidate provides a public good, while the others work in the market sector. In a benchmark model where potential candidates differ only in skills, the quality of the elected politician is shown to increase with pay. If public service motivation is also considered, then an inverted U‐shaped relationship is found.

Suggested Citation

  • Alessandro Fedele & Pierpaolo Giannoccolo, 2020. "Paying Politicians: Not Too Little, Not Too Much," Economica, London School of Economics and Political Science, vol. 87(346), pages 470-489, April.
    • Handle: RePEc:bla:econom:v:87:y:2020:i:346:p:470-489
    DOI: 10.1111/ecca.12319
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    Cited by:

    1. David Bartolini & Agnese Sacchi & Domenico Scalera & Alberto Zazzaro, 2023. "Voters’ Distance, Information Bias and Politicians’ Salary," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 637-664, July.
    2. Benny Geys & Rune J. Sørensen, 2024. "A post‐politics earnings penalty? Evidence from politicians' lifetime income trajectories (1970–2019)," Kyklos, Wiley Blackwell, vol. 77(1), pages 57-76, February.
    3. Prasenjit Banerjee & Vegard Iversen & Sandip Mitra & Antonio Nicolò & Kunal Sen, 2020. "Moral reputation and political selection in a decentralized democracy: Theory and evidence from India," WIDER Working Paper Series wp-2020-26, World Institute for Development Economic Research (UNU-WIDER).
    4. Thanh Le & Erkan Yalcin, 2023. "Lobbying, political competition and the welfare effect of campaign contribution tax," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(2), pages 158-179, May.
    5. Augusto Cerqua & Samuel Nocito & Gabriele Pinto, 2025. "Pay Incentives to Run for Local Governments," CESifo Working Paper Series 11778, CESifo.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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