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Does remuneration affect the discipline and the selection of politicians? Evidence from pay harmonization in the European Parliament

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  • Thomas Braendle

Abstract

We study the harmonization of the base pay for the Members of the European Parliament (MEPs). Prior to this reform, implemented in 2009, base pay was aligned with that of national parliamentarians, causing large differences in pay between the MEPs representing 27 member states. Based on detailed information on individual MEPs between 2004 and 2011, we find that the reform, which introduced an exceptional base pay increase of 200 % per national delegation on average, has a positive incentive effect on in-office effort proxied by the number of speeches, written declarations and reports drafted. However, more generous remuneration is associated with higher rates of absenteeism. With respect to political selection, we find that higher pay also raises reelection rates. The composition of the pool of MEPs in terms of (ex-ante) quality approximated by formal education, previous political experience in elected office and occupational background is, however, unaffected. If we restrict our attention to newly elected MEPs, a salary increase is related to fewer MEPs with previous political experience at the highest national level. Copyright Springer Science+Business Media New York 2015

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  • Thomas Braendle, 2015. "Does remuneration affect the discipline and the selection of politicians? Evidence from pay harmonization in the European Parliament," Public Choice, Springer, vol. 162(1), pages 1-24, January.
    • Handle: RePEc:kap:pubcho:v:162:y:2015:i:1:p:1-24
    DOI: 10.1007/s11127-014-0184-0
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    1. Auerbach, Jan, 2022. "Productive Office and Political Elitism," MPRA Paper 114582, University Library of Munich, Germany.
    2. Alexandre Volle & Antoine Cazals & Bilal El Rafhi, 2023. "Another Wind of Change? Evidence about Political Outsiders in the French Parliament," Revue d'économie politique, Dalloz, vol. 133(2), pages 203-231.
    3. Braendle, Thomas & Stutzer, Alois, 2016. "Selection of public servants into politics," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 696-719.
    4. Christian Staat & Colin R. Kuehnhanss, 2017. "Outside Earnings, Electoral Systems and Legislative Effort in the European Parliament," Journal of Common Market Studies, Wiley Blackwell, vol. 55(2), pages 368-386, March.
    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. Heggedal, Tom-Reiel & Helland, Leif & Morton, Rebecca, 2022. "Can paying politicians well reduce corruption? The effects of wages and uncertainty on electoral competition," Games and Economic Behavior, Elsevier, vol. 135(C), pages 60-73.
    7. Bagchi Sutirtha, 2021. "Does the Strength of Incentives Matter for Elected Officials? A Look at Tax Collectors," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(3), pages 967-1012, July.
    8. 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).
    9. 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.
    10. 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.
    11. Nicolas Gavoille, 2021. "Pay for politicians and campaign spending: evidence from the French municipal elections," Public Choice, Springer, vol. 188(3), pages 455-477, September.
    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. Caria, Andrea & Cerina, Fabio & Nieddu, Marco, 2023. "Choosing not to lead: Monetary incentives and political selection in local parliamentary systems," European Journal of Political Economy, Elsevier, vol. 79(C).
    14. Gamalerio, Matteo & Trombetta, Federico, 2021. "Fiscal Rules and the selection of politicians : theory and evidence from Italy," QAPEC Discussion Papers 10, Quantitative and Analytical Political Economy Research Centre.
    15. Cerina, Fabio & Deidda, Luca G., 2017. "Rewards from public office and the selection of politicians by parties," European Journal of Political Economy, Elsevier, vol. 47(C), pages 1-18.
    16. Amihai Glazer & Hideki Konishi, "undated". "Why High-level Executives Earn Less in the Governmental Than in the Private Sector," Working Papers 2215, Waseda University, Faculty of Political Science and Economics.
    17. Inger Baller, 2017. "Specialists, party members, or national representatives: Patterns in co-sponsorship of amendments in the European Parliament," European Union Politics, , vol. 18(3), pages 469-490, September.
    18. Wochner, Timo, 2022. "Part-time parliamentarians? Evidence from outside earnings and parliamentary activities," European Journal of Political Economy, Elsevier, vol. 75(C).
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    More about this item

    Keywords

    Political selection; Remuneration of politicians; Electoral system; European Parliament; D72; D73;
    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

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