Moral hazard in electoral teams: List rank and campaign effort

Abstract

How do parties motivate candidates to exert effort in closed-list elections, where seat outcomes are uncertain only for candidates in marginal list positions? We argue that parties can solve this moral hazard problem by committing ex ante to allocate higher offices in government, such as cabinet portfolios, monotonically with list rank. Under this schedule of compensation, parties have incentives to rank candidates in order of quality (under some conditions) and candidates have incentives to increase the volume and geo-diversity of their campaign efforts as their rank improves. Using detailed data on Norwegian candidates and their use of mass and social media in recent elections, we confirm that (1) candidate quality increases with list rank, and (2) candidates in safer ranks shift from intra-district to extra-district and national media exposure—a composition of effort that can increase their party’s chance of entering government, and thus their own potential share of the spoils.