The Double Dividend of Political Competition∗

Does electoral competition lead to a better selection of politicians while also providing stronger reelection incentives to incumbents? To address the existence of this double dividend of political competition, we introduce a theoretical model in which ideological parties select candidates between party loyalists and experts, and allocate them into the electoral districts. Non-ideological voters care about national and local policies and strongly prefer experts, who are better able to respond to the shocks to the economy. Parties hence face a trade-off between party loyalty and expertise. We show that com-petition disciplines political parties to select more experts and to allocate them in more contestable districts. In this setup, expert candidates serve as a commitment device for the future policies. The model also suggests that reelection incentives induce incum-bents in contestable districts to exert more effort. This effect is particularly strong for low-quality incumbents. Empirical evidence on Italian members of parliament confirms the main predictions of the model. According to different indicators of contestability of the districts, we find that measures of ex-ante quality—such as years of schooling