Ernesto Dal Bó

Capture by Threat

We analyze a simple stochastic environment where policymakers can be threatened by ”nasty” interest groups. In the absence of these groups, the policymaker’s desire for reelection guarantees that good policies are implemented for every realization of the shock. When pressure groups can harass the policymaker, good policies will be chosen for only a subset of states of nature. In order to enlarge this subset, the public will often ...nd it convenient to elect ”strong” political leaders, increase the cost of exerting pressure and provide rents to those in power. The last result could be used as an explanation for the existence of political parties. They play a role resembling that of the supervisor in the literature on collusion in hierarchical agency. The paper also helps explain why honest politicians may choose bad policies. JEL classi...cation: D72, D78.

Who Becomes a Politician

Can a democracy attract competent leaders, while attaining broad representation? Economic models suggest that free-riding incentives and lower opportunity costs give the less competent a comparative advantage at entering political life. Moreover, if elites have more human capital, selecting on competence may lead to uneven representation. This paper examines patterns of political selection among the universe of municipal politicians and national legislators in Sweden, using extraordinarily rich data on competence traits and social background for the entire population. We document four new facts that together characterize an “inclusive meritocracy.” First, politicians are on average significantly smarter and better leaders than the population they represent. Second, this positive selection is present even when conditioning on family (and hence social) background, suggesting that individual competence is key for selection. Third, the representation of social background, whether measured by parental earnings or occupational social class, is remarkably even. Fourth, there is at best a weak tradeoff in selection between competence and social representation, mainly due to strong positive selection of politicians of low (parental) socioeconomic status. A broad implication of these facts is that it is possible for democracy to generate competent and socially-representative leadership.