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Unintended Effects of Transparency: The Consequences of Income Disclosure by Politicians

Author

Listed:
  • Carina Neisser

    (University of Cologne & IZA)

  • Nils Wehrhöfer

    (Deutsche Bundesbank)

Abstract

Public disclosure laws on politicians’ outside income aim to enhance electoral accountability, but their effects remain unclear and may backfire. Using a German disclosure reform, administrative tax data, and a difference-in-difference design, we show that MPs increased their outside income after public disclosure. We find suggestive evidence that the effect is driven by right-leaning MPs. A survey among voters shows that perceptions of outside income differ by party alignment: right-leaning voters view it as a sign of competence, while left-leaning voters associate it with weaker voter representation. These findings highlight the complex interplay between transparency, voter perception, and political behavior.

Suggested Citation

  • Carina Neisser & Nils Wehrhöfer, 2025. "Unintended Effects of Transparency: The Consequences of Income Disclosure by Politicians," ECONtribute Discussion Papers Series 354, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:354
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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_354_2025.pdf
    File Function: First version, 2025
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    More about this item

    Keywords

    Tax data; outside income; politicians; income disclosure;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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