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http://hdl.handle.net/10419/41055
  
Title:Reputation sells: Compensation payments in the political sphere PDF Logo
Authors:Ahlfeld, Corinna
Issue Date:2010
Series/Report no.:Diskussionsbeiträge // Volkswirtschaftliches Seminar, Universität Göttingen 145
Abstract:Bargaining between different groups, which differ in objectives, preferences and interests, is at the core of political decision-making. Yet, it is logical to presume that negotiations involving more parties will lead to inertia and a slow pace in the legislative process. According to this hypothesis, political systems involving many veto-players such as federal countries or international organisations must be prone to a low activity. Oddly enough, a closer look on the European Unions' and Germany's legislation activity level shows that these are fairly high, although in both systems exist a considerably amount of opportunities to block or delay reforms. Decision-making in this framework is mostly brought about by side-payments, which are usually not reported to the public. This poses a question. If compensation payments are able to fuel the decision process by balancing interest and help to avoid reform deadlocks why are they frequently disguised? This paper addresses this question by suggesting that politicians do avoid openly paid compensation payments out of concerns over their reputation and that decision-making is rather a strategically action than showing majorities for a certain topic.
Subjects:compensation
logrolling
side-payments
political reform
political economy
Document Type:Working Paper
Appears in Collections:Diskussionsbeiträge aus dem Volkswirtschaftlichen Seminar, Universität Göttingen

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