We explore the role of the motivation of politicians in democracies when long-term policies are socially desirable. Politicians receive utility from holding office and from the success of their projects. We refer to the two extreme types of politicians as populists and policy success-seekers....

As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is...