We build a citizen-candidate model of representative democracy to study the candidate quality and, accordingly, the expected quality of elected politicians. Our main result is that the effect of reward for office holders on the candidate quality hinges on campaigning costs. Surprisingly, increasing the reward may lower the average candidate quality when the campaigning costs are sufficiently high. It may be possible to design a political system maximizing the candidate quality only when campaigning costs are high.
JEL classifications: D70, D72, D79, H11, J24.
Keywords: politicians’ competence, the quality of government, career concerns, campaigning costs, rewards for elected officials, citizen candidate models
Length: 40 pages
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