Reward from public office and the selection of politicians by parties

We investigate the relationship between quality of politicians, defined in terms of their competence (skills), and rewards from public oce in a game between parties and citizens in which parties play a crucial role in the selection of politicians. Parties shape the selection of politicians by manipulating information about the quality of their candidates. An increase in the rewards from public offices leads to two opposing effects on the average quality of politicians. First, a selection effect, whereby more skilled citizens enter politics, leading to an increase in average quality. Second, a manipulation effect, as parties have the incentive to further manipulate information so to increase the probability of election for their unskilled candidates from whom they can extract higher rents in the form of service duties. We find that the second effect dominates when: i. Parties’ costs of manipulating information are sufficiently low; ii. Even in the absence of manipulation, the quality of information available to citizen about candidates is sufficiently poor; iii. Net gains from becoming a politicians for unskilled citizens are sufficiently larger than those for skilled citizens. These findings provide a rationale for the ambiguous sign of the empirical relationship between quality and pay of politicians.