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.


José Bautista

Well...I dont agree with you. I think in democracy politicians should be real people, interested in helping society and not in getting rich. If you say "ok, but if you dont pay very well, the best ones will take another job and will left politics" then I say "This ones are not good politicians, they think just about theirselfs and not about improving society". In my opinion, politicians should be the first example to follow, but they are not similar to regular citizens.

Thanks for the article, regards from Chile

Rob

You are ideologically spot on... and as with most other ideologically driven arguments, your idea falls apart on implementation. In the real world, those politicians are working risky, high profile jobs that expose themselves and their families to high stress, relentless criticism, and burdensome levels of personal scrutiny. Any reasonable person would (rightfully) expect to be compensated in proportion to the demands of the job.

brent

My preference would be to reduce their stress and burdens by restricting their access to power and money. That way their compensation would match up as well.

jonathan

The idea is wholly unattractive if speaking about elected office versus an appointed or hired-for job. People run for office because of the power inherent in the office.

Enter your name...

It might depend on the office you're thinking of. I don't think that junior state legislators find that there is very much power inherent in their office.

IMO legislative salaries ought to be high enough for the elected official to support a family as well as a decent, middle-class home near the capital (unless your district includes the capital, or unless your government had enough sense to build official residences for legislators). A legislator who is worrying about how to pay the rent, or who has to sleep in his office because he can't afford to keep up two homes on the salary, isn't going to be effective.

Darrell

The Jr. State legislators have long since sold off any power the position may have held.

Look at Illinois and tell me the currency isn't power. Illinois is held in the hands of Michael Madigan. He controls the purse strings of the Illinois Democrats...if you are a Jr. State Legislator with a differing opinion and you want to speak up about it, you risk losing campaign dollars. Try introducing a bill he doesn't approve...it dies a silent death.

richard

Being a teacher is a career. Being a politician isn't (wasn't) supposed to be one. When you structure government so that it *requires* fulltime politicians (not the same as appointees/employees who can be paid), then you CREATE the PROFESSIONAL politician.

This is how we destroyed representative democracy. Instead of "choosing" representatives, we "hire" them...and it turns out that they are hard to terminate (who knew, right).

Now you can argue that unpaid political service favors the wealthy....but the current system creates the wealthy....is that any better?

SFOtter

No, it would only continue to attract those that want money and power and would do nothing to ensure 'good stewardship'. What might work is having the pay & benefits for Federal representatives and Senators taken out of the Federal government's hands and given to the states they are from. That would keep congress from voting themselves pay raises and having platinum-plated benefits while the rest of us suffer.

richard

"...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."

The military?

Rocketman

What about everyone else that is in civil service that gets paid no where near the wage of those in office? They give there lives everyday for the greater good of society and don't expect too much in return.

Yes a higher wage will attract a smarter, more educated person to the position but then they are doing it for the wrong reasons. Working as a politician is supposed to be for the greater good of the Country. Not for monetary gain.

Making 174,000 a year will be more the 90% of the people they represent. Yes they are in the public light, but who knows where there Senator stands on issues or who there Senator is for that matter.

Enter your name...

"Everyone else that is in civil service" does NOT get underpaid. Some civil service positions in the United States are seriously underpaid (congressional staffers spring to mind) and others are paid more than they would get in a private sector job (janitors, for example).

It's important to remember that accurate comparisons are based on total compensation, not on paychecks alone. The typical civil service employee gets a generous, lifelong pension with decent retiree healthcare plus a moderate paycheck. The typical private sector employee gets a better paycheck but no pension, no retiree healthcare, and often no (or very little) contribution to non-pension retirement savings.

When you add it all up, the typical civil service employee's total compensation is better (except for teachers, which are usually about the same as private sector employees in the end). The civil service employees feel worse off while they're working, because their neighbor doing similar work has more cash now, but they're actually far better off in the end, when they've got their retirement pay and healthcare package, and their neighbors are wondering why they ever spent that cash on a new car or fancy clothes instead of saving for their retirement years.

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mike law

Doesn't the respective political party's selection process have a greater influence on the quality of MPs and other elected officials?

Christina

Well, you have the best and brightest running the top jobs in the most lucrative sectors such as Bankers for example. And when they are so smart, they can outsmart most people, including the heavily guarded regulators, even under watchful eyes. And see where these people get us in our world economy today? How many of the failing banks are the citizens bailing out now, enabled by the governments?

So imagine the reverse, you have the brightest running the country with the most power. And if they also outsmart the citizens and business community to enrich themselves, eliminate their civic liberties and freedom, how do you get rid of them (other than election every 4 years) if they are even good at gerrymandering? What do you get? You get business elites and the govt elites in cahoots, and you the poor citizens having to bail them out and paying through their nose!! Don't believe me, just go ask the Singaporeans, how free and happy they really are.

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Max

Have skyrocketing executive salaries resulted in better executives? Certainly, it's not good to pay officials too little to support themselves - take, for example, Texas, where legislator pay hasn't been increased since the state was formed. However, top-ranking federal officials are already paid a handsome salary and provided with excellent benefits; they may not be as good as top-ranking corporate positions, but holding a political position dramatically increases a person's earning power afterward, giving them everything from book deals to highly-paid lobbyist positions.

It's not likely to make them more resistant to moneyed interests, either. It's already quite clear that no matter how much money someone has, they'll always be tempted by more. After all, it's not like the many millionaires in the Senate are relying on bribes just to pay their bills - but that doesn't stop them from taking the bribes.

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Dan Aris

It seems to me that part of the problem with the way things are set up now is not so much that people could become Congresspeople and make $X or become (say) lobbyists and make $X*Y, but rather that people can become Congresspeople who make $X, and then, *because they were Congresspeople*, become lobbyists making $X*Y.

D

It isn't that the quality of representation is bad, it's that the people have a the feeling that they aren't represented well.

The two party system makes it easy for the economic powers-that-be to fund both sides of the aisle. This results in a never-ending back-and-forth political signalling that never actually goes anywhere.

Change the electoral system to one that doesn't result in only two parties.

Eric M. Jones.

I think if we pay our CEOs more they will spend their time trying to run the business better instead of thinking about how to make more money...oh, never mind.

MikeM

Is this a joke? Any politician can make many times their salary in awarding of contracts or "consulting" as a side business ... at least until they're indicted.

ZNS

It's a complex question. One side of it would suggest that paying them below the market wage would insure that the only people who participate in politics do so because of their genuine interest in public service.

Steve Gibson

In the US the cost of running for public office is often multiples of the pay while in office. So, the basis of what constitutes compensation should be better defined. We need a variable loosely defined as "increase in wealth as a result of holding office." Also, positions are taken as a springboard to jump into other positions so pay might not be a factor at all.

The key question though might also apply to the corporate world. Salaries levels are set too maximize competition for the position and are not based on actual performance which comes later. So , until we can peg pay to actual performance, reason would have it that the politician or executive would perform the minimum amount necessary to keep his job as there is little added compensation for exceeding base expectations.

My suspicions are. in politics or business, that pay and performance are loosely correlated at best, but I would yield to available data.

Could the efficiency and "corruption free" status (if true..) in Singapour be from other factors such as harsher than usual punishments for criminality?

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Jay

No. Our system has wealthy individuals running for positions having salaries that are only a fraction of the amount spent running for the position. The economic incentives provided by the salary are clearly irrelevant, otherwise why would the politicians (and those seeking their election) be willing to spend more than the positions pay? Clearly it must be the "power" (meaning the ability to provide favors to those willing to return the favor through campaign contributions or other forms of allowable payments -- even if those payments are received after leaving office) that attracts people to political office, not the salary paid by the government.

Kevin H

I believe that is not a linear correlation as it is an U shaped curve. Better salary may attract people with higher education, but too much money can at the same time create division among the public servants and the people they serve. I would like to see the cases of Sweeden, Denmark and Finland included in this ecuation.

Breno Lara

All this seems to make sense. However, I guess both researches are kind of misleading. What is the point of measuring the quality of any services by the background or IQ of the managers/politicians? The real point is: does a better background correspond to a better service?

In a system like ours, here in Brazil, that provides high incentives to cheating, I doubt that could be true. In fact, when integrity is missing, a better background or IQ actually make things worse!

Is there any research connecting these points?

Bodger

It might be more beneficial to go the other way. Pay them nothing -- every one that I've had experience with or read about is on a power trip of one sort or another and most are willing to do or spend virtually anything to get into office to feed their needs. If the money being spent is from bribes (I use the term quite advisedly and with full knowledge of its meaning) paid by the monied select buying future influence then so much the better for the would-be pols. Then if we could find some straightforward way to execute the really bad ones we'd be home free...

[WORDPRESS HASHCASH] The poster sent us '0 which is not a hashcash value.

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.