Higher bars for incumbents and experience
| DOI | 10.1177/0951629816664419 |
| Published date | 01 July 2017 |
| Author | Hans Gersbach,Markus Müller |
| Date | 01 July 2017 |
| Subject Matter | Articles |
Article
Higher bars for incumbents
and experience
Journal of Theoretical Politics
2017, Vol. 29(3) 492–513
©The Author(s) 2016
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DOI:10.1177/0951629816664419
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Hans Gersbach
CER-ETH – Center of Economic Research at ETH Zurich and CEPR, Zurich, Switzerland
Markus Müller
CER-ETH – Center of Economic Research at ETH Zurich, Zurich, Switzerland
Abstract
This paper focuses on the introduction of higher re-election bars for office-holders. In particular,
we assess which re-election bars are optimal when incumbents gain socially valuable experience
in office. We develop a two-period model in which the output of a public good depends on an
office-holder’s effort, ability and experience. When campaigning for election to an open seat in
the first period, candidates can make binding offers of the minimum share of the votes they must
obtain to be re-elected in the second period, should they win in the first. We prove that, in
equilibrium, both candidates offer the same vote-share threshold, that it exceeds 50%, and that
it is socially optimal. The higher threshold increases the expected effort over both periods and
tends to raise the expected level of ability of office-holders in the second. Together, these effects
outweigh the expected loss of incumbents’ acquired experience, which results from their reduced
chances of getting re-elected with the higher bar. The socially optimal vote threshold is increasing
in the value of experience. All of the above conclusions would hold if the optimal threshold were
set instead by law.
Keywords
Elections; experience; incumbency advantage; political contracts; vote-share thresholds
1. Introduction
1.1. Motivation and idea
While citizens and candidates for public office may differ in their ideological leanings
and views of distributional justice, they share many objectives,such as economic growth,
full employment, efficient infrastructure, good education systems and security. Ensuring
Corresponding author:
Hans Gersbach, CER-ETH – Center of Economic Research at ETH Zurich and CEPR, 8092 Zurich,
Switzerland.
Email: hgersbach@ethz.ch
Gersbach and Müller 493
that able candidates are elected to office and motivating them, once elected, to work for
these common goals are, therefore, vital concerns in representative democracies; and
the electoral cycle, in which incumbents must stand for re-election, is the main device to
meet them. In practice, however, it is applied in a very rigid way, inasmuch as incumbents
seeking re-election need no more votes than their challengers in order to win.
Weshall argue that introducing the possibility that incumbents face higher thresholds
than new candidates seeking office, whereby the level of the threshold arises endoge-
nously as part of the electoral campaign process, could improve social welfare. This
holds, even if there are social gains from incumbents’ experience in office. The key point
of this paper is that although such experience is socially valuablei noffice and will attract
more votes, higher bars for incumbents result in the deselection of the significantly less
able among them. Moreover, higher bars for incumbents tend to motivate newly elected
candidates to exert more effort to produce public goods. We establish that these latter
effects can outweigh the expected loss of losing incumbents’ experience, and so raise
aggregate welfare.
1.2. Model and results
We employ a simple two-period model in which voters elect an office-holder at the start
of each period. In the first, two candidates (say, a left-wing and a right-wing candidate)
compete in an open-seat election. The winner chooses an ideological policy, which meets
with varying degrees of approval among the electorate, and a level of public good provi-
sion, which all voters value equally. Howmuch of the public good is provided depends on
the office-holder’s ability and effort. If, moreover, he is re-elected to a second term, output
will be higher for given levels of ability and effort, reflecting the gains from experience
in the first term.
During the campaign, candidates cannot commit to ideological policies or to specific
levels of provision of the public good. What they can do, however, is to make a binding
commitment to the vote threshold to which they will be held in the second period, in the
event that they are elected in the first. These vote thresholds can be any fraction of votes
in 1
2, 1, and are called vote-share contracts.
In this framework, a vote-share threshold above 50% does indeed improve welfare.
Effort is higher in the first period, as is the expected level of effort over the two-period
cycle. The expected level of ability of second-period office-holders also increases if ex-
perience matters sufficiently. Together, these effects always outweigh the expected loss
of incumbents’ acquired experience that results from their lower chances of getting
re-elected, even if the expected level of ability of second-period office-holders should
fall.
What is more, both candidates, spurred on by the rewards of office, offer the socially
optimal vote threshold, which is always more than 50% of the votes in the second period.
Thus, competition in vote-share contracts always improves welfare relative to standard
elections, in which the hurdle is 50% for incumbents and challengers alike.
The socially optimal vote threshold is increasing in the value of experience, as is the
gain in welfare relative to standard elections. The reason is that voters then are more
inclined to vote for an incumbent of a given ability, which they can infer from his per-
formance in office. Thus, this incumbent will be supported by a larger majority in his
re-election bid. Higher vote-share thresholds, moreover, induce higher effort in the first
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