|Title:||Unraveling short- and farsightedness in politics|
|Authors :||Gersbach, Hans|
|Published in :||Public Choice|
|Publisher / Ed. Institution :||Springer|
|License (according to publishing contract) :||Licence according to publishing contract|
|Type of review:||Peer review (publication)|
|Subject (DDC) :||320: Politics|
|Abstract:||The absence of a deselection threat in incumbents’ last term in office can be negative or positive for the polity. Some politicians may reduce their efforts, while others may pursue beneficial long-term policies that may be unpopular in the short term. We propose a novel pension system that solves the effort problem while preserving the willingness to implement long-term policies. The idea is to give politicians the option to choose between a flexible and a fixed pension scheme. While in the fixed scheme, performance has no impact on the pension, the pension increases with short-term performance in the flexible scheme, using the vote share of the officeholder’s party in the next election as a performance indicator. Such a pension choice improves the well-being of citizens since officeholders are encouraged to invest in those activities that are beneficial for society. We analyze the properties and consequences of such a system. Finally, we extend the pension system with choice to non-last-term situations and derive a general welfare result.|
|Departement:||School of Management and Law|
|Organisational Unit:||Institute of Public Management (IVM)|
|Publication type:||Article in scientific journal|
|Appears in Collections:||Publikationen School of Management and Law|
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