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Two Roles for Elections: Disciplining the Incumbent and Selecting a Competent Candidate

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  • Berganza, Juan Carlos

Abstract

This paper presents a political economy model in which the voters want to control moral hazard on the part of the incumbent and select a competent candidate to be in office. We focus on elections that take place repeatedly as the basic disciplinary and screening mechanism. It is shown that incomplete information of the voters about the (economic) competence of the incumbent helps to overcome the lame duck effect of a government with foreseeable end. A second finding is that economic performance strongly influences the reelection of the incumbent. In particular, in (stationary perfect Bayesian) equilibrium, if economic performance is bad, the incumbent will not be reelected. We also prove that having the possibility of reelecting a government increases the welfare of the voters to the no reelection benchmark. Copyright 2000 by Kluwer Academic Publishers

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  • Berganza, Juan Carlos, 2000. "Two Roles for Elections: Disciplining the Incumbent and Selecting a Competent Candidate," Public Choice, Springer, vol. 105(1-2), pages 165-193, October.
    • Handle: RePEc:kap:pubcho:v:105:y:2000:i:1-2:p:165-93
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    Cited by:

    1. Artur Grigoryan, 2015. "Delegation in sovereign wealth funds," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(4), pages 363-380, December.
    2. Juan Carlos Berganza, 1998. "Relationships Between Politicians and Voters Through Elections: A Review Essay," Working Papers wp1998_9809, CEMFI.
    3. Gaudeul, Alexia & Keser, Claudia, 2017. "The social preferences of democratically elected decision makers and the conflict between wealth generation and distribution," University of Göttingen Working Papers in Economics 327, University of Goettingen, Department of Economics.
    4. Silva, Rui, 2024. "Well-being foundations of populism in Europe," European Journal of Political Economy, Elsevier, vol. 81(C).
    5. Foerster, Manuel & Voss, Achim, 2022. "Believe me, I am ignorant, but not biased," European Economic Review, Elsevier, vol. 149(C).
    6. Querubin, Pablo & Snyder, James M., 2013. "The Control of Politicians in Normal Times and Times of Crisis: Wealth Accumulation by U.S. Congressmen, 1850–1880," Quarterly Journal of Political Science, now publishers, vol. 8(4), pages 409-450, October.
    7. Edoardo Grillo, 2014. "Reference Dependence and Politicians' Credibility," Carlo Alberto Notebooks 353, Collegio Carlo Alberto.
    8. Thomas Husted & David Nickerson, 2022. "Governors and electoral hazard in the allocation of federal disaster aid," Southern Economic Journal, John Wiley & Sons, vol. 89(2), pages 522-539, October.
    9. Kristin Kanthak, 2002. "Top-Down Divergence," Journal of Theoretical Politics, , vol. 14(3), pages 301-323, July.
    10. Artur Grigoryan, 2011. "Incentives and the delegation of decision making power in sovereign wealth funds," Volkswirtschaftliche Diskussionsbeiträge 146-11, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    11. Artur Grigoryan, 2011. "Incentives and the Delegation of Decision Making Power in Sovereign Wealth Funds," MAGKS Papers on Economics 201117, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    12. Mario Gilli & Elena Manzoni, 2019. "Populism, the Backlash against Ruling Politicians and the Possible Malfunctioning of Representative Democracy," Working Papers 417, University of Milano-Bicocca, Department of Economics, revised Aug 2019.
    13. Phongthorn Wrasai, 2005. "Politicians' Motivation, Role of Elections, and Policy Choices," Tinbergen Institute Discussion Papers 05-050/1, Tinbergen Institute.
    14. Silvia Dominguez Martinez & Otto H. Swank & Bauke Visser, 2006. "Disciplining and Screening Top Executives," Tinbergen Institute Discussion Papers 06-054/1, Tinbergen Institute.
    15. Grillo, Edoardo, 2016. "The hidden cost of raising voters’ expectations: Reference dependence and politicians’ credibility," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 126-143.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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