Indirect accountability of political appointees

Abstract

This paper explores the indirect accountability of political appointees. The appointee’s quality is uncertain, and voters hold the politician accountable for the appointee’s performance. The politician has better information about the appointee than voters do, but electoral concerns induce the politician to make inefficient retention decisions. Specifically, there is over-retention of appointees relative to the social optimum. If the quality of candidates for appointment is low, then improving the pool of candidates can help reduce distortions and, in fact, it is in the interest of the politician to do so. I also show that more public information about the appointee reduces over-retention.