Abstract
We propose to supplement the democratic election mechanism by threshold contracts. A threshold contract stipulates a performance level that a politician must reach in order to obtain the right to stand for reelection. “Read my lips” turns into “read my contract”. Politicians can offer threshold contracts during their campaigns. Equilibrium threshold contracts are welfare improving and do not violate the liberal principle of free and anonymous elections in democracies.
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We would like to thank Johannes Becker, Peter Bernholz, Robert Dur, Joao E. Gata, Volker Hahn, Susanne Lohmann, Christian Schultz, Otto H. Swank, Heinrich Ursprung, conference participants at the annual meeting of the Public Choice Society 2000, the European meeting of the Econometric Society 2001 and the annual congress of the European Economic Association 2001 in Lausanne, seminar participants in Heidelberg and Mannheim and the referee for valuable suggestions and comments. Financial support from the Deutsche Forschungsgemeinschaft (DFG) is gratefully acknowledged.
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Gersbach, H., Liessem, V. Reelection threshold contracts in politics. Soc Choice Welfare 31, 233–255 (2008). https://doi.org/10.1007/s00355-007-0277-5
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DOI: https://doi.org/10.1007/s00355-007-0277-5