Replacement and Reputation

TL;DR

This paper models electoral accountability through reputation, showing that under certain conditions, good politicians can be sustained or opportunists disciplined, ensuring long-term voter interests.

Contribution

It introduces a reputational model analyzing how electoral replacement influences politician effort and accountability under different economic conditions.

Findings

Good long-run outcomes are always attainable.

In conducive environments, some equilibria sustain effort, others allow shirking.

Selection ensures eventual good politicians, leading to permanent effort.

Abstract

Does electoral replacement ensure that officeholders eventually act in voters' interests? We study a reputational model of accountability. Voters observe incumbents' performance and decide whether to replace them. Politicians may be "good" types who always exert effort or opportunists who may shirk. We find that good long-run outcomes are always attainable, though the mechanism and its robustness depend on economic conditions. In environments conducive to incentive provision, some equilibria feature sustained effort, yet others exhibit some long-run shirking. In the complementary case, opportunists are never fully disciplined, but selection dominates: every equilibrium eventually settles on a good politician, yielding permanent effort.