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Vote-share Contracts and Democracy

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  • Gersbach, Hans

Abstract

In this paper we introduce vote-share contracts. Such contracts contain a vote-share threshold that incumbents must reach in order to be reelected. In a simple model, we illustrate the working of vote-share contracts. Such vote-share contracts curb socially detrimental incumbency advantages by improving the average ability level of re-elected politicians and also increase effort. We show that the socially optimal vote-share threshold for incumbents is larger than one half. Competing candidates offer vote-share contracts with socially optimal thresholds.

Suggested Citation

  • Gersbach, Hans, 2007. "Vote-share Contracts and Democracy," CEPR Discussion Papers 6497, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6497
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    References listed on IDEAS

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    1. Alberto Alesina & Alex Cukierman, 1990. "The Politics of Ambiguity," The Quarterly Journal of Economics, Oxford University Press, vol. 105(4), pages 829-850.
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    6. Gersbach, Hans, 1992. "Allocation of information by majority decisions," Journal of Public Economics, Elsevier, vol. 48(2), pages 259-268, July.
    7. Hans Gersbach, 2004. "Competition of Politicians for Incentive Contracts and Elections," Public Choice, Springer, vol. 121(1), pages 157-177, October.
    8. Gregory D. Hess & Athanasios Orphanides, 2001. "War and Democracy," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 776-810, August.
    9. Larry Samuelson, 1984. "Electoral equilibria with restricted strategies," Public Choice, Springer, vol. 43(3), pages 307-327, January.
    10. Hans Gersbach & Markus Müller, 2006. "Elections, Contracts and Markets," CER-ETH Economics working paper series 06/56, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    11. Cukierman, Alex & Tommasi, Mariano, 1998. "When Does It Take a Nixon to Go to China?," American Economic Review, American Economic Association, vol. 88(1), pages 180-197, March.
    12. Anderson, Simon P & Glomm, Gerhard, 1992. "Incumbency Effects in Political Campaigns," Public Choice, Springer, vol. 74(2), pages 207-219, September.
    13. Justin Buchler, 2007. "The social sub-optimality of competitive elections," Public Choice, Springer, vol. 133(3), pages 439-456, December.
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    16. repec:cup:apsrev:v:101:y:2007:i:02:p:303-320_07 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Gersbach, Hans, 2017. "Flexible Majority Rules in democracyville: A guided tour," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 37-43.
    2. Caselli, Francesco & Cunningham, Tom & Morelli, Massimo & Moreno de Barreda, Inés, 2012. "Signalling, Incumbency Advantage, and Optimal Reelection Thresholds," CEPR Discussion Papers 8832, C.E.P.R. Discussion Papers.
    3. Hans Gersbach & Verena Liessem, 2008. "Reelection threshold contracts in politics," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(2), pages 233-255, August.
    4. Markus Müller, 2009. "Vote-Share Contracts and Learning-by-Doing," CER-ETH Economics working paper series 09/114, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    5. Gersbach, Hans, 2009. "Higher Vote Thresholds for Incumbents, Effort and Selection," CEPR Discussion Papers 7320, C.E.P.R. Discussion Papers.
    6. Francesco Caselli & Tom Cunningham & Massimo Morelli & Inés Moreno de Barreda, 2012. "Signalling, Incumbency Advantage, and Optimal Reelection Rules," CEP Discussion Papers dp1122, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    elections; political contracts; vote-share thresholds;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H4 - Public Economics - - Publicly Provided Goods

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