Does It Matter How and How Much Politicians are Paid

Dados Bibliográficos

ID9722754
AutoresDuha T Altindag (0009-0005-4671-1611, Auburn University), Elif S Filiz (0000-0003-3869-2981, University of Southern Mississippi, autor correspondente), Erdal Tekin (0000-0002-6158-0286, American University, IZA and NBER)
Ano2020
Volume87
Fascículo348
Páginas1105-1132
Data de publicação2020-10-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/ecca.12336
OpenAlexW2737015638
IdiomaEN
Citações recebidas1
Referências citadas22

An important question in representative democracies is how to ensure that politicians behave in the best interests of citizens rather than in their own private interests. One institutional device available to regulate the actions of politicians is their pay structure. This paper provides fresh insights into the impact of income on the performance of politicians using a unique law change implemented in Turkey in 2012. Members of parliament ( MP s) in Turkey, who are retired from their pre‐political career jobs, earn a retirement pension on top of their MP salaries. A 2012 law significantly increased MP s’ pension earnings by pegging it to 18% of the President's salary, while keeping the earnings of non‐retired MP s unchanged. Using a difference‐in‐differences strategy, we find that the increase in earnings due to the 2012 law reduced the overall performance of retired MP s, as measured by legislative activities, by 12.3% of a standard deviation. We find that the law change also reduced MP s’ attendance at parliamentary sessions. Given the design features of the Turkish reform, we believe that it is the increase in demand for leisure, not selection and re‐election incentives, that serves as the main explanation for our finding

Business · Earnings · Economics · Incentive · Labour economics · Legislature · Market economy · Parliament · Pension · Political science · Politics · Salary · Accounting · Electoral Systems and Political Participation · Finance · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth · Law