Bad politicians

We present a simple theory of the quality (competence and honesty) of elected officials. Our theoryoffers three main insights. Low-quality citizens have a ‘comparative advantage’ in pursuing electiveoffice, because their market wages are lower than those of high-quality citizens (competence), and/orbecause they reap higher returns from holding office (honesty). Hence, voters may find themselvessupply constrained of high-quality candidates. Second, bad politicians generate negative externalitiesfor good ones, making their rewards from office increasing in the average quality of office holders.This leads to multiple equilibria in quality. Third, incumbent policymakers can influence the rewardsof future policymakers, leading to path dependence in quality: bad governments sow the seeds formore bad governments.[...]