A Political Economy Model of Congressional Careers

By Daniel Diermeier, Michael P. Keane, Antonio Merlo. 2005

414 citations recorded by the source corpus.

Theories in political economy depend critically on assumptions about motivations of politicians. Our analysis starts from the premise that politicians, like other economic agents, are rational individuals who make career decisions by comparing the expected returns of alternative choices. The main goal of the paper is to quantify the returns to a career in the United States Congress. To achieve this goal we specify a dynamic model of career decisions of a member of Congress and we estimate this model using a newly collected data set. Given estimates of the structural model, we assess reelection probabilities for members of Congress, estimate the effect of congressional experience on private and public sector wages, and quantify the value of a congressional seat. Moreover, we use the estimated model to assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns to a career in Congress.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/dc169497310536c176668233c7995f63bac2d091

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Citations in the corpus

MPs for Sale? Returns to Office in Postwar British Politics (2009, background): “Looking at the U.S. Congress, Diermeier et al. (2005) conclude based on a survey of former members’ first jobs after leaving office that legislative experience confers a considerable boost in earning power. they hold more than 15% of the issued share capital or shares worth more than 100% of the…”
Paying Politicians: Theory and Evidence (2004, background): “Specifically, increasing E induces entry by the relatively less competent congruent group.22 For small γ the first effect dominates and average competence increases.”
Revolving door lobbyists (2012, background): “…often put forward by lobbyists themselves, is that the importance of individuals with prior government experience is due to higher innate ability (Burger 2006; see also Diermeier et al. 2005 and Matozzi and Merlo 2008) and/or human capital accumulation (Salisbury et al. 1989, Eggen and Kindy 2009).”
Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence (2020, background): “According to a comprehensive study of congressional careers by Diermeier et al. (2005), exits of politicians from Congress are most typically official retirement from office, sudden deaths, or scandals.”
Do Better Paid Politicians Perform Better? Disentangling Incentives from Selection (2013, neutral): “Di Tella and Fisman (2004) look at gubernatorial pay in the US from 1950 to 1990 and find that wages respond to changes in state income and taxes per capita.”
A practitioner’s guide to Bayesian estimation of discrete choice dynamic programming models (2012, neutral): “…has been applied to study a manager’s decision to replace old equipment (e.g., Rust 1987), career decision choice (e.g., Keane and Wolpin 1997; Diermeier et al. 2005), choice to commit crimes (e.g., Imai and Krishna 2004), dynamic brand choice (e.g., Erdem and Keane 1996; Gönül and…”
Term Limits and Electoral Accountability (2013, neutral): “Hence we have p 1− β ≥ V(π̂) ≥ V(π0) (19)”
Monotone Stochastic Choice Models: The Case of Risk and Time Preferences (2015, neutral): “The standard approach uses discounted utility U ω (x) = ∑ tDω(t)u(xt), with discount functions for which Dω(0) = 1 and limt→∞Dω(t) = 0 and with a parameter space Ω = R+.(17) The utility function over monetary outcomes u is strictly increasing and continuous.”
Pay for Politicians and Candidate Selection: An Empirical Analysis (2011, positive): “Groseclose and Krehbiel (1994), Hall and Van Houwelling (1995) and Diermeier et al. (2005) examine the effects of financial incentives on the related question of whether incumbents re-run for office.”
Dynamic Discrete Choice Structural Models: A Survey (2010, neutral): “are Eckstein andWolpin (1999)’s study of the determinants of high school exit or completion and the model of congressional careers of Diermeier et al. (2005).”