Would Paying Politicians More Attract Better Politicians?

Singaporean Prime Minister Lee Hsien Loong at the G20 Cannes summit in 2011. (Photo: Pablo Manriquez)

Whenever you look at a political system and find it wanting, one tempting thought is this: Maybe we have subpar politicians because the job simply isn’t attracting the right people. And, therefore, if we were to significantly raise politicians’ salaries, we would attract a better class of politician.

This is an unpopular argument for various reasons, in part because it would be the politicians themselves who have to lobby for higher salaries, and that isn’t politically feasible (especially in a poor economy). Can you imagine the headlines?

But the idea remains attractive, doesn’t it? The idea is that, by raising the salaries of elected and other government officials, you would a) signal the true importance of the job; b) attract a kind of competent person who might otherwise enter a more remunerative field; c) allow politicians to focus more on the task at hand rather than worry about their income; and d)  make politicians less susceptible to the influence of moneyed interests.

Some countries already pay their government officials a lot of money — Singapore, for instance. From Wikipedia:

Ministers in Singapore are the highest paid politicians in the world, receiving a 60% salary raise in 2007 and as a result Prime Minister Lee Hsien Loong‘s pay jumped to S$3.1 million, five times the US$400,000 earned by President Barack Obama. Although there was a brief public outcry regarding the high salary in comparison to the size of the country governed, the government’s firm stance was that this raise was required to ensure the continued efficiency and corruption-free status of Singapore’s “world-class” government.

Although Singapore recently cut its politicians pay drastically, the salaries remain relatively very high.

But is there any evidence that paying politicians more actually improves quality?

A 2009 paper by Claudio Ferraz and Frederico Finan (abstract; PDF) makes that case:

In this paper, we examine whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries of local legislators across Brazil’s municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population. Our main findings show that higher wages increases political competition and improves the quality of legislators, as measured by education, type of previous profession, and political experience in office. In addition to this positive selection, we find that wages also affect politicians’ performance, which is consistent with a behavioral response to a higher value of holding office.

And a new working paper by Ernesto Dal Bo, Frederico Finan, and Martin Rossi (abstract; PDF) finds that the quality of civil servants is also increased when higher wages are offered:

We study a recent recruitment drive for public sector positions in Mexico.  Different salaries were announced randomly across recruitment sites, and job offers were subsequently randomized.  Screening relied on exams designed to measure applicants’ intellectual ability, personality, and motivation.  This allows the first experimental estimates of (i) the role of financial incentives in attracting a larger and more qualified pool of applicants, (ii) the elasticity of the labor supply facing the employer, and (iii) the role of job attributes (distance, attractiveness of the municipal environment) in helping fill vacancies, as well as the role of wages in helping fill positions in less attractive municipalities.  A theoretical model guides each stage of the empirical inquiry.  We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work – i.e., we find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labor supply elasticity of around 2 and some degree of monopsony power.  Distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities. 

I am not willing to argue that paying U.S. government officials more would necessarily improve our political system. But, just as it seems a bad idea to pay a schoolteacher less than a commensurately talented person can make in other fields, it is probably a bad idea to expect that enough good politicians and civil servants will fill those jobs even though they can make a lot more money doing something else.


Joe J

Nope I doubt that would help at all. The problem is with any elected position, it is more importaint to be able to fake sincerity , look good, hide the skeletons well, and talk well, then actually to have any kind of intelligence or morals.
We live in a world of soundbites, and politicians with body language coaches and groomers. That is what wins elections.
I know I could never be a politician, has nothing to do with pay or benifits. I'm not great infront of a camera, and I'm frankly too honest. And when looking at their full benif

As to the ' pay a schoolteacher less than a commensurately talented person can make in other fields" it is laughable. What other field works only 180 days in the year and as Chicago is arguing, for sometimes as little as 6 hrs a day. Are you really comparing someone working 30 hours a week, for with a job that is over 60 hrs.

vicky

I think Bernard Williams wrote about politics and moral character. It's a very interesting point of view and of course he was a grate philosopher.
Here is the information were you can get the article! Public and Private Morality ed. Stuart Hampshire (Cambridge: Cambridge University Press, 1978) 55-73.

Regards from Argetina.

Joe J

A corrilary question would be, how much would one have to pay someone to run for an office.
Most people who run don't win, but you have to spend a lot of time efffort and stress on trying for the job.
Take the upcoming Presidential election. we had, 8 people initially spending months trying for a chance to be nominated. Let alone actually winning.

It reminds me of the research done on the economics of drugs sales. That it is very much a slanted lottery, only the top person, makes real money, while the bottom level get very little, but do get an apparent chance at reaching the top one day.

Tony J.

I don't think any U.S. politician is hurting for money. I do understand the economic logic though of raising a wage to attract a higher quality applicant. This could work wonders in the education system. Rather than students wanting to be doctors, lawyers, bankers, etc. they may instead pursue teaching. Many a great mind is pushed to pursue higher paying jobs solely for the sake of the higher pay.

JohnnyK

I would say that the Bell, California debacle where locale leaders paid themselves in the high 6 figures shows how bad it can be to pay politicians more. It might be an issue of taking a few elections to get the best politicians.
I live in San Francisco and they raised the Board of Supervisors pay a few years ago and I still have not seen any good results.

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Matt

The "right" people aren't avoiding politics because of the pay. All our presidents have advanced degrees from Ivy League universities. Heck, Jimmy Carter worked on nuclear reactors in submarines... Attracting people who can do whatever they want or make whatever they want isn't the issue with politics. The issue is that power corrupts. Always has.

Mark

While the concept that higher pay attracts better applicants makes sense, it misses a fundamental concept. Do you get paid more for higher achievement? Simply looking at recruiting efforts does not retention. Civil service jobs have a higher appeal to those looking for stability and longevity, not those seeking upward mobility. While a higher entry salary may be attractive, initially, to talented prospects, the reality of meager cost of living increases and limited opportunity for merit-based advanced will quickly push them into the private sector.

John

Not so. Many high-level elected officials and civil servants do not rely on their public service jobs as real sources of income. The ones that I have met left lucrative private-sector jobs when they were asked to serve. Rather, a successful person should be quite prepared to temporarily cease his normal level of earning for a few years in order to hold office and perform a public service.

I think we don't get better quality politicians because the job just sucks: more time has to be spent fundraising and campaigning than actually governing; the media is a nightmare to deal with and destroys any sense of privacy for oneself and one's family; and partisanship, career politicians, and entrenched interests make it almost impossible to actually accomplish anything.

Tim F

Seems to me that the problem with politicians has more to do with the hiring - and firing -process than the salary. The best paid politicians are dictators and not many people would claim that North Korea has a great leader.

Andrew B

No way. We have the highest paid city councilmen in the country in Los Angeles, and very highly paid state legislators in California, and most nonpartisan observers would say those are among the worst run elected bodies in government.

Ellen K

This flies in the face of what Daniel Pink states in "Drive," In his studies higher pay doesn't equate to better function. In fact the best work was done for free because the individual had a passion for the topic involved. Apply this to government and it makes it where we reinstate an oligarchy onthe assumption that they are our intellectual and moral betters. That's not a real big step from reinstating royalty. I prefer Pink's view.

Pronghorn

I suggest that each State pay the salary and benefits for their Senators and Representatives. See what happens, if the States paying $1,000,000 get better politicians than the States paying $100,000.

mike law

I'll give you an example from here in the UK where higher pay doesn't equate to quality representation.

I live in the London Olympic host borough Newham . We have an elected Mayor who's a blatant self promoter. He is a Labour Party candidate (no other political party would get voted in in the borough). He's created a number of highly paid positions on the council and put hush close friends in the posts. Not one has any worthwhile abilities.

Zach

I live in Singapore and this is just one of the examples of the country using the lesson of freaknomics: The power of incentives. Through taxes, subsidies and other regulations the government influences traffic congestion, the supply of taxis during peak hours, consumption of alcohol and cigarettes, education, public transportation, population growth, family planning, investing, saving for retirement and is also attempting to cool an overheated housing market.

The locals jokingly say of the government that there is no problem they can't solve with taxes but it seems to work.

There are some unintended consequences however as the ruling party clings to their high paying jobs through gerrymandering and manipulation of the media (which it controls).

Deepak Nagar

There is no "cause and effect" between salary and effectiveness. Why should it work this way for politicians when it does not seem to work in corporate world?

Mattia Pole

I live in Italy. Our politicians and public sector "chairmen" have the highest wages in UE and, believe me, our public services SUCK.

http://therebelekonomist.blogspot.it/

Andrea Canidio

On a related note: why politicians should be paid cash? Why not paying part of their salary in long-term government bonds? There has been a lot of discussion about using pay packages to correct for CEOs short-terms incentives. I guess similar insights are valid when discussing politician's pay.

Andrew W Roy

If money is a contributing factor for someone to consider becoming a politician then that someone shouldn't be a politician.