The Transparency of Politics and the Quality of Politicians

Politics has always attracted the attention of the media, citizens organizations, and the general public. Recent years have also witnessed a global process of “spectacularization” of politics, which, among other things, has resulted in a dramatic increase in the amount of information available about many facets of political life. Politicians, for example, are public figures, and much of what they do is now the object of close public scrutiny. Nevertheless, the extent to which various aspects of what goes on within the political sector are observable from the outside, which we refer to as the transparency of politics, still varies a great deal across countries. For example, while in some countries all individual votes in the legislature are part of the public record (e.g., the United States and Sweden), this is not the case in others (e.g., Italy and Spain). Also, while many democracies have adopted disclosure laws that require political parties and politicians to report all the contributions they receive (e.g., Canada and the United Kingdom), such laws are not in place in several other countries (e.g., Austria and Finland). It is therefore interesting to ask whether the transparency of politics may be systematically related to political outcomes, and whether more transparency would lead to better outcomes. In particular, in this article, we analyze the relationship between the transparency of politics and the quality of politicians, and focus on the recruitment of politicians by political parties. Parties represent a fundamental institution of representative democracy, and are the political-sector analogues of firms in the market sector. By and large, politicians are affiliated with a party, and typically start their political careers by working for party organizations (see, e.g., Heinrich Best and Maurizio Cotta 2000). Hence, the recruiting decisions of parties determine the quality of the pool of politicians

Medicracy, Second Version

We study the initial recruitment of individuals in the political sector. We propose an equilibrium model of political recruitment by two political parties competing in an election. We show that political parties may deliberately choose to recruit only mediocre politicians, in spite of the fact that they could afford to recruit better individuals. Furthermore, we show that this phenomenon is more likely to occur in proportional electoral systems than in majoritarian electoral systems.Politicians, Parties, Political Recruitment, Electoral Systems, All-pay Auctions

Mediocracy

In this paper, we study the initial recruitment of individuals in the political sector. We propose an equilibrium model of political recruitment by a party who faces competition for political talent from the lobbying sector. We show that a political party may deliberately choose to recruit only mediocre politicians, in spite of the fact that it could afford to recruit better individuals who would like to become politicians. We argue that this finding may contribute to explain the observation that in many countries the political class is mostly composed of mediocre people.

Political Careers or Career Politicians?

Two main career paths are prevalent among politicians in modern democracies: there are career politicians (i.e., politicians who work in the political sector until retirement), and political careers (i.e., there are politicians who leave politics before retirement and work in the private sector). In this paper, we propose a dynamic equilibrium model of the careers of politicians in a political economy with a private sector and a political sector, where individuals are heterogeneous with respect to their market ability and political skills. We characterize the conditions under which the two career paths emerge in equilibrium, and investigate the effects of monetary incentives and other features of the political-economic environment on the quality of politicians and their careers. Our analysis also provides a rationale for the existence and the survival of political parties.politicians, parties, careers in politics

The Transparency of Politics and the Quality of Politicians

In this paper, we analyze the relationship between the transparency of politics and the quality of politicians in a model of parties’ political recruitment. We find that an increase in the transparency of politics reduces the average quality of the politicians a party recruits in equilibriumTransparency, politicians, parties, political recruitment

Political Careers or Career Politicians?

Two main career paths are prevalent among politicians in modern democracies: there are career politicians (i.e., politicians who work in the political sector until retirement), and political careers (i.e., there are politicians who leave politics before retirement and work in the private sector). In this paper, we propose a dynamic equilibrium model of the careers of politicians in an environment with a private sector and a political sector, where individuals are heterogeneous with respect to their market ability and political skills. Our analysis provides an explanation for the existence of career politicians and individuals with political careers, and their motivations. We also investigate the effects of monetary incentives and other features of the political-economic environment on the quality of politicians and their careers. We show that an increase in the salary a politician receives while in office decreases the average quality of individuals who become politicians, decreases turnover in office, and may either decrease or increase the average quality of career politicians.

Mediocracy, Third Version

We study the recruitment of individuals in the political sector. We propose an equilibrium model of political recruitment by two political parties competing in an election. We show that political parties may deliberately choose to recruit only mediocre politicians, in spite of the fact that they could select better individuals. Furthermore, we show that this phenomenon is more likely to occur in proportional than in majoritarian electoral systems.Politicians, parties, political recruitment, electoral systems, all-pay auctions.

Can We Insure Against Political Uncertainty? Evidence from the U.S. Stock Market

We show that existing stocks that are currently traded in the U.S. stock market can be used to hedge political uncertainty. Focusing on the 2000 U.S. Presidential election, we construct two "presidential portfolios" composed of selected stocks anticipated to fare differently under a Bush versus a Gore presidency. To construct these portfolios we use data on campaign contributions by publicly traded corporations and identify the major contributors on each side. Using daily observations for the six months before the election took place, we show that the excess returns of these portfolios with respect to overall market movements are significantly related to changes in electoral polls