Accountability , Selection , and Experience : Theory and

Previous theoretical and empirical research on term limits has focused on the problem of accountability—that is, the possibility that term-limited politicians exert less effort than those who are eligible to run for reelection. We present a model with both accountability and selection effects, in which term limits not only cause incumbents to shirk but also interfere with voters’ ability to reelect highquality candidates. We also show how this model can be extended to address the possibility that incumbent quality increases with experience in office. We evaluate our model by taking advantage of variation in gubernatorial term limit laws across states and over time. We find evidence suggesting that term limits not only cause politicians to shirk, but also reduce expected incumbent quality by limiting voters’ ability to select competent politicians and by limiting incumbents’ ability to gain experience in office. We thank Tim Besley, John Gasper, Christina Gathmann, Rema Hanna, Ilyana Kuziemko, Rene Lindstadt, and seminar participants at the University of Chicago, Florida State University, the 2006 Annual Meeting of the Midwest Political Science Association, and the 2007 Annual Meeting of the American Political Science Association for helpful comments. Conventional wisdom holds that the desire to win reelection keeps politicians accountable for their policy choices. It is often suggested that term limits interfere with this mechanism by removing politicians’ incentive to maintain a favorable reputation. However, the empirical literature on this topic is surprisingly small and focuses almost exclusively on the problem of accountability, or moral hazard. This emphasis on elections as a mechanism for punishing poorly-behaved incumbents ignores the possibility raised by many observers that elections are primarily a selection mechanism that enables voters to choose competent politicians (see, for example, Fearon 1999), which would suggest that term limits have the additional effect of removing voters’ ability to reelect high-quality politicians. In this paper, we present and test a model that allows for voters to select among incumbents on the basis of ability, as well as for elections to discipline incumbents. We use this model to generate predictions about incumbent performance under one-term limits, two-term limits, and no term limits. The expected ability of incumbents improves with each additional term in office, offsetting the effect of shirking among second-term lame ducks but not first-term lame ducks. The model therefore predicts that performance will be worse under one-term limits than under two-term limits, and worse under two-term limits than under no term limits. We also show that these results hold up even if, in addition to the selection effect, incumbent quality improves with experience in office as a result of on-the-job learning. We test our model using data from the American states, which have witnessed a major change in gubernatorial term limit laws over the last half century: the gradual shift from one-term limits to two-term limits in nearly one-third of the states. During this same period, other states had two-term limits or no term limits. This variation in term limit laws across states and time 1 We use the phrase “lame duck” to refer to the entire term of an incumbent who is ineligible to run for re-election, rather than to the brief period after an election in which an incumbent continues to serve despite not having been reelected.