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Pay for politicians and campaign spending: evidence from the French municipal elections

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Abstract

This paper studies the relationship between politicians’ pay and the campaign spending of candidates running in the French municipal elections. For that purpose, I construct a dataset containing the campaign records of all lists running in the 2008 and 2014 elections in municipalities of more than 9000 inhabitants. I implement a regression discontinuity design exploiting a population threshold in elected officials’ pay. The results show that, around the 20,000-inhabitant threshold, the pay level negatively impacts candidates’ spending. That puzzling result is not only statistically significant, but also economically sizeable: the amounts spent by lists running in municipalities just above the threshold are up to 35% less than those of lists running just below the population threshold. The result combines with an important reduction in the intensity of political competition, favoring an incumbent’s reelection. I also provide some evidence of a decline in mayoral quality. The results suggest that politicians’ pay does shape their incentives, but higher pay can favor the persistence of low-quality mayors.

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Notes

  1. This rationale is developed in “Competitive Salaries for Competent and Honest Government” (1994).

  2. “Commission Nationale des Comptes de Campagnes et des Financements Politiques” (CNCCFP, National Committee for Campaign Return and Political Financing).

  3. Contributions disaggregated at the individual level are not available.

  4. During the Vichy interlude, mayors were appointed, not elected. Before 1942, mayors received only defrayals of expenses (except in Paris).

  5. The 38% pay gap is in the same range as in related papers. For instance, Gagliarducci and Nannicini (2013) study a 33% pay raise and Kotakorpi and Poutvaara (2011) a 35% increase. As will be detailed below, the municipal council is composed of a mayor, deputy mayors and councilors.

  6. Binet and Pentecôte (2004) and Foucault et al. (2015) report evidence of political budget cycles in the French municipal context.

  7. The winning list is first granted 50% of the seats; then the remaining seats are allocated proportionally to vote shares.

  8. I do not observe any single case in which the top candidate of the winning list was not in turn elected mayor by the municipal council.

  9. For mayors holding multiple offices (e.g., mayor and member of the National Assembly), mayoral pay accounts for only part of their remuneration. The 38% increase refers only to the pay associated with holding municipal office. Note also that compensation figure represents the maximum that the municipal council can vote for the mayor.

  10. The shift to proportional representation at the 1000-inhabitant threshold was introduced at the 2014 elections. It was set previously at 3500 inhabitants.

  11. Kinks in the spending cap per inhabitant occur at both 15,000 and 30,000 inhabitants. Note that that range is not the bandwidth used in the regression discontinuity analysis below, as the bandwidth will be specific to each regression and determined using the data-driven method proposed by Calonico et al. (2014).

  12. www.cnccfp.fr.

  13. www.insee.fr.

  14. The Right includes UMP, UDI and “divers droite”. The Left includes PS, PC, the Greens, FG and “divers gauche”. EXR and EXL respectively stand for extreme right and extreme left.

  15. This test is similar to the McCrary (2008) test, except that the procedure does not require the widths and positions of bins to be specified, hence limiting subjectivity. As explained above, the INSEE can update population numbers between official censuses. In addition, I thus check whether the populations of municipalities close to the threshold are more likely to be updated. Only 41 municipalities experienced updates. I do not find any discontinuity in the probability of an update at the threshold, as reported in Table 6.

  16. The number of observations within the bandwidth used for the estimation of the regression changes in each specification. As an example, for the first specification in Fig. 5, 408 observations are on the left of the threshold and 319 are on the right.

  17. A strong positive correlation exists between the ranking based on vote share and the ranking based on spending (the Spearman rank coefficient is 0.62). The results are qualitatively similar when the rankings based on the vote shares are considered, as shown in Online Appendix.

  18. Weaker competition could drive larger numbers of first-round victories, mechanically reducing personal spending as it shortens the campaign. Even though the number of first-round victories is larger above the threshold, the reductions in candidates’ spending remains qualitatively similar when excluding those cases.

  19. To investigate the role of incumbency in more detail, it would be useful to compare situations in municipalities wherein the incumbent runs to municipalities in which the incumbent does not seek reelection. However, with the incumbent running in roughly 80% of cases, too few observations are available.

  20. I also computed the average age and the shares of council members with high and low skills aggregated at the municipal council level and checked whether a discontinuity can be observed at the 20,000-inhabitant threshold. I do not observe any significant jumps.

  21. To my knowledge, no data exists on the outside earnings of French politicians.

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Acknowledgements

I am grateful to the Editor-in-Chief, William F. Shughart II, and to two anonymous reviewers for their useful and constructive comments. I would like to thank Étienne Farvaque, Katharina Hofer, Mariana Lopes da Fonseca, Fabio Padovano, Antoine Pietri, Marc Sangnier and participants at the EPCS conference, Budapest, 2017, the FREE Network meeting, Riga, 2017, the PEARL workshop, Braga, 2017, the 3rd Workshop on Political Economy, Lille, 2017, the LAGV, conference, Aix-en-Provence, 2018, the University of Tartu seminar, 2018, and the CEFER/Bank of Lithuania seminar, 2019 for many useful comments and suggestions. All errors are mine.

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  1. Stockholm School of Economics in Riga, Riga, Latvia

    Nicolas Gavoille

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Gavoille, N. Pay for politicians and campaign spending: evidence from the French municipal elections. Public Choice 188, 455–477 (2021). https://doi.org/10.1007/s11127-020-00839-w

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