Article written by 2007 DPDF The Political Economy of Redistribution Fellow Guy Grossman and W. Walker Hanlon:
We offer a framework for analyzing the impact of monitoring—a commonly recommended solution to poor leadership—on the quality of democratically elected leaders in community organizations in low-income countries. In our model, groups may face a trade-off between leader ability and effort. If the group’s ability to monitor the leader is low, then the leader may exert too little effort. A higher level of monitoring increases leader effort, raising the value of the public good. However, more intense monitoring may also drive higher-ability members to opt out of candidacy, reducing public-goods value. The result is an inverted U-shaped relationship between the level of monitoring and the value of the public good. The trade-off between leader effort and ability, however, only exists in the presence of sufficient private-income opportunities. These predictions are assessed using original data gathered from Ugandan farmer associations.