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Multitasking, limited liability and political agency

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This paper considers a political accountability framework in which the politician exerts unobserved e¤ort in two independent dimensions. Since the worst payo¤ to the politician is removal from o¢ ce, this contracting environment exhibits limited liability. We show that limited liability implies that it is di¢ cult to implement vectors that devote attention to both dimensions. Hence citizens must decide between a high e¤ort allocation to a single task or a low total e¤ort allocation split between the two tasks. Given this, we consider why we do not observe more direct elections of separate ministers, which would allow for better balanced allocations of e¤ort. We …nd that if elections are primarily used as devices to weed out low type politicians, a united executive dominates one with divided accountability. These results give support to the view that elections act chie‡y as selection devices.

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