Working Paper: NBER ID: w21151
Authors: S. Boraan Aruoba; Allan Drazen; Razvan Vlaicu
Abstract: This paper proposes a structural approach to measuring the effects of electoral accountability. We estimate a political agency model with imperfect information in order to identify and quantify discipline and selection effects, using data on U.S. governors for 1982-2012. We find that the possibility of reelection provides a significant incentive for incumbents to exert effort. We also find a selection effect, although it is weaker in terms of its effect on average governor performance. According to our model, the widely-used two-term regime improves voter welfare by 4.2% compared to a one-term regime, and find that a three-term regime may improve voter welfare even further.
Keywords: Electoral Accountability; Political Agency Model; Term Limits; Discipline Effects; Selection Effects
JEL Codes: D72; D73; H70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| possibility of reelection (D72) | higher effort among incumbents (D29) |
| higher effort among incumbents (D29) | increase in overall fraction of governors exerting high effort (D29) |
| two-term limit regime (P30) | enhances voter welfare (D72) |
| disciplining effect of bad governors (D73) | increases voter welfare (K16) |
| better first-term performance (P27) | higher likelihood of good governors surviving to second term (D72) |
| high effort by bad governors (H79) | complicates voters' ability to identify them as bad (D72) |
| observable effort (C90) | increases discipline (Y80) |
| increased term limits (D72) | significant increase in discipline (Y80) |
| increased term limits (D72) | increase in voter welfare (K16) |