Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance

• Development Workshop

Date and Location

Monday, June 3, 2013, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

This paper examines whether higher wages for politicians improve political performance, increase competition for office, and attract higher quality candidates. To identify these effects, we exploit a constitutional amendment that sets non-linear salary caps on the wages of local legislators across Brazil’s municipal government. Using this exogenous variation, we show that higher wages increase legislative productivity, resulting in more legislative bills and public goods provision. Higher wages also increase political competition and attract wealthier and more educated candidates. Despite these political entry effects, we show that higher wages increase re-election rates among incumbent politicians.