Political Liability Insurance for Campaign Promises

In liberal democracies, the inability of voters to enforce campaign pledges represents an agency problem, as politicians can make non-binding promises during elections without incurring ex ante costs. This paper introduces an economic model of mandatory liability insurance for political campaign promises. Under this framework, candidates running for office must obtain liability insurance for at least one quantifiable policy target. Insurance companies screen candidates and assess risks, setting individualized premiums paid by the candidates that reflect candidate credibility, expertise, and policy feasibility. Insurance details are disclosed to the electorate, providing voters with additional information. After the election, an independent evaluation body determines whether the promised thresholds have been met. If a promise is not fulfilled, the insurer pays financial compensation into a public fund. Political liability insurance thus offers a potential solution to the problem of unenforceable campaign promises, promoting a more transparent and accountable electoral process.