Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171557
Authors: 
Müller, Markus
Year of Publication: 
2009
Series/Report no.: 
Economics Working Paper Series 09/114
Abstract: 
We examine the interaction between vote-share contracts and learning-by-doing. Candidates for a political office are allowed to offer vote-share thresholds. The elected politician has to achieve at least this threshold value in his reelection result to remain in office for a second term. We assume there are learningby- doing effects for incumbents and show that competition leads to vote-share contracts implementing the socially optimal threshold, which is above one-half. Vote-share contracts improve the average ability level of a reelected politician and increase effort in the first term of an incumbent. On the other hand, vote-share contracts reduce the probability that learning-by-doing takes place. However, the overall effect of vote-share contracts is welfare-enhancing, even under the assumption of learning-by-doing.
Subjects: 
elections
political contracts
vote-share thresholds
learning-by-doing effects
incumbency advantage
JEL: 
D71
D82
H4
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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