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MPs For Sale? Estimating Returns to Office in Post-War British Politics
Unformatted Document Text:  In this paper we examine the wealth of British politicians in order to assess the extent to which Members of Parliament (MPs) appear to have personally profited from office. Our approach is to compare the wealth at death (measured by probate values) of former MPs with that of parliamentary candidates who were narrowly defeated and thus never served in Parliament. In very close elections the winner is chosen almost at random, such that narrowly unsuccessful candidates are quite similar to narrow winners in measured characteristics such as age, education, and occupation, as well as in harder-to-measure characteristics like inherited wealth, well-connectedness, and charisma. The lives of nar- rowly defeated candidates thus illuminate the “road not taken” by MPs – the experiences they passed up by entering politics. A careful comparison of the post-election lives of MPs and narrow losers can therefore provide a valid estimate of the effects (financial and otherwise) of serving in Parliament. To carry out this comparison, we created an original dataset consisting of the names, backgrounds, and electoral fortunes of every politician who stood for the House of Commons between 1950 and 1970, and we collected the probate values for a subset of relatively competitive candidates (both successful and unsuccessful) who have since died. Using both non-parametric matching methods and a regression discontinuity design to account for remaining differences between winners and losers, we find that serving in Parliament in fact had a large financial benefit for members of the Conservative party but not for Labour MPs. We estimate that Conservative MPs roughly doubled their wealth by serving in Parliament; the median Conservative MP bequeathed around 530, 000 GBP (in 2007 prices) but would have left around 245, 000 GBP if he had not been elected. (For comparison, in the general population of England the median male over 65 in 2002 had around 120, 000 GBP in wealth.) While ours is the first study to look in such depth at the finances of British politicians, our results are consistent with existing knowledge about money in Parliament. The House of Commons offers its members relatively modest pay but allows them to engage in almost any sort of outside financial arrangement short of outright bribery. It is not unusual (let 2

Authors: Eggers, Andy. and Hainmueller, Jens.
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In this paper we examine the wealth of British politicians in order to assess the extent
to which Members of Parliament (MPs) appear to have personally profited from office.
Our approach is to compare the wealth at death (measured by probate values) of former
MPs with that of parliamentary candidates who were narrowly defeated and thus never
served in Parliament. In very close elections the winner is chosen almost at random, such
that narrowly unsuccessful candidates are quite similar to narrow winners in measured
characteristics such as age, education, and occupation, as well as in harder-to-measure
characteristics like inherited wealth, well-connectedness, and charisma. The lives of nar-
rowly defeated candidates thus illuminate the “road not taken” by MPs – the experiences
they passed up by entering politics. A careful comparison of the post-election lives of
MPs and narrow losers can therefore provide a valid estimate of the effects (financial and
otherwise) of serving in Parliament.
To carry out this comparison, we created an original dataset consisting of the names,
backgrounds, and electoral fortunes of every politician who stood for the House of Commons
between 1950 and 1970, and we collected the probate values for a subset of relatively
competitive candidates (both successful and unsuccessful) who have since died. Using both
non-parametric matching methods and a regression discontinuity design to account for
remaining differences between winners and losers, we find that serving in Parliament in
fact had a large financial benefit for members of the Conservative party but not for Labour
MPs. We estimate that Conservative MPs roughly doubled their wealth by serving in
Parliament; the median Conservative MP bequeathed around 530, 000 GBP (in 2007 prices)
but would have left around 245, 000 GBP if he had not been elected. (For comparison, in
the general population of England the median male over 65 in 2002 had around 120, 000
GBP in wealth.)
While ours is the first study to look in such depth at the finances of British politicians,
our results are consistent with existing knowledge about money in Parliament. The House
of Commons offers its members relatively modest pay but allows them to engage in almost
any sort of outside financial arrangement short of outright bribery. It is not unusual (let
2


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