Elections, Contracts and Markets
As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is used to predict the long-term performance of a policy, while threshold contracts stipulate a price level on the political information market that a politician must reach to have the right to stand for reelection. Reelection thresholds are offered by politicians during campaigns. We show that, on balance, the triple mechanism increases social welfare.
|Date of creation:||Jun 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39.
- David Romer, 2003.
"Misconceptions and Political Outcomes,"
Royal Economic Society, vol. 113(484), pages 1-20, January.
- Hans Gersbach & Verena Liessem, 2008.
"Reelection threshold contracts in politics,"
Social Choice and Welfare,
Springer, vol. 31(2), pages 233-255, August.
- Wolfers, Justin & Zitzewitz, Eric, 2004.
1854, Stanford University, Graduate School of Business.
- Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997.
"Separation of Powers and Political Accountability,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1163-1202, November.
- Eric Maskin & Jean Tirole, 2004.
"The Politician and the Judge: Accountability in Government,"
American Economic Review,
American Economic Association, vol. 94(4), pages 1034-1054, September.
- Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," Economics Working Papers 0020, Institute for Advanced Study, School of Social Science.
- Eric Maskin, 2003. "The Politician and the Judge: Accountability in Government," Theory workshop papers 505798000000000076, UCLA Department of Economics.
- repec:reg:rpubli:259 is not listed on IDEAS
- Berlemann, Michael & Schmidt, Carsten, 2001.
"Predictive accuracy of political stock markets: Empirical evidence from an European perspective,"
Dresden Discussion Paper Series in Economics
05/01, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
- Berlemann, Michael & Schmidt, Carsten, 2001. "Predictive accuracy of political stock markets: Empirical evidence from a European perspective," SFB 373 Discussion Papers 2001,57, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Gersbach, Hans & Schneider, Maik, 2012.
"Tax Contracts and Elections,"
CEPR Discussion Papers
9054, C.E.P.R. Discussion Papers.
- Hahn, Volker, 2009. "Reciprocity and voting," Games and Economic Behavior, Elsevier, vol. 67(2), pages 467-480, November.
- John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
- Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-37, July.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5717. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.