Why ex-politicians have it so good?

15. maijs, 2009


Vjačeslavs Dombrovskis

It's truly remarkable how Latvian ex-politicians land well-paid jobs, usually on the boards of state-owned firms. Former prime minister Kalvitis (People's Party) just got a place on the board of at Lattelekom, a telecommunications giant that is partially state-owned. Prime Minister Dombrovskis (New Era Party) just said this was one of the conditions for forming the coalition with the People's Party. This appointment can be hardly called a "job" as Mr Kalvitis has little, if any, experience in telecommunications. But it's a very generous reward for his disastrous performance as a prime minister.

He is not an exception. Here is a lovely one from LETA (emphasis mine):

“MURNIECE DISMISSES LIELJUKSIS. Latvian Interior Minister Linda Murniece has decided to dismiss Interior Ministry state secretary Aldis Lieljuksis, appointing to the post deputy state secretary Ilze Petersone.

The minister has offered Lieljuksis a pro-rector’s job at the Latvian Police Academy, saying that while holding the post of State Police chief Lieljuksis made several grave mistakes and there are no guarantees that he will not repeat them.”

All in the name of providing good education for Latvia’s future policemen, I suppose.

But seriously, why are ex-politicians rewarded with political jobs, even if their incompetence made them a liability to their political parties? This is not a trivial question. These “political appointments” are costly to the parties – I am sure the voters don’t take this lightly. Thus, there has to be a benefit to rewarding ex-politicians, even the failed ones. I will leave explanations like comradeship, friendship, etc. to sociologists and focus on the ones that work from individual self-interest. I think there are two such explanations.

First, it is a signal to existing and potential members of the party that they will not be abandoned even after their career is over. “We look after our own”, or something like that. However, this introduces some bad incentives for the party members. After all, if they expect a nice retirement package no matter what their political performance is, why invest effort in performing well? It’s more optimal for a party to offer a package like “We will look after you, if you do well, if you screw up – you’re on your own.” That’s not what we see. So maybe we should look for another explanation.

So here comes the second, and a more sinister explanation. If an organization operates in the shadow of the law, its members may possess sensitive information. In other words, they may “know too much”. In this case, to ensure the interests of the group, you either (i) physically eliminate ex-members, or (iii) provide them with a sufficient reward so that they keep their mouth shut. Then, the prevalence of political appointment for ex-politicians may tell you something about the way in which political system works.

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