Abstract
We analyze the motivation of politicians in democracies when long-term policies are socially desirable. Politicians receive utility from holding office and from the success of their projects. We refer to the two extreme types of politicians as “populists” and “policy success-seekers”. One result is that inefficiencies in the political process are smaller when a politician is of the populist type. When politicians offer incentive contracts, the problem of inefficient decision-making may be solved. The amount of money necessary to induce the incumbent to undertake the socially optimal project decreases with the degree of populism he displays.
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JEL Classification: D72, D82
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Müller, M. Motivation of politicians and long-term policies. Public Choice 132, 273–289 (2007). https://doi.org/10.1007/s11127-007-9151-3
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DOI: https://doi.org/10.1007/s11127-007-9151-3