Political short-termism: a possible explanation

Abstract

We consider a two-period model in which politicians differ in their motivations, and show that a good politician may suboptimally provide a public good that gives an immediate payoff because if he provided one that gives a payoff only in the second term, the citizens would consider it sufficiently likely that he is a bad politician and, therefore, they would not reelect him. Quite surprisingly, such short-termism may be socially optimal: it increases the probability that the office will be held in the future by a good politician and induces a bad politician to act more in the public interest.