Political dynasties, which pass on public offices and other political privileges from family member to family member, have been important in the United States throughout its history. This paper investigates whether dynastic political privilege enhances incumbent accountability to voters, as incumbents with family political capital work to maintain favorable reputations even in the incumbents' last period. This would mitigate last-period problems, in contrast with earlier empirical results in which incumbents in their last period in office deliver inferior economic results. We test the hypothesis that dynastic political privilege increases accountability using data for 1950-2005 on U.S. governors, including a new data set on the family relationships of politicians.
The Constitution of the United States embodies the political ideals of the founders, whose goal was to establish a republican national government that was responsible to the nation's people, that specified the powers of the federal government, that recognized the rights of the states, and that incorporated checks and balances which would limit governmental power. This new government was to be a direct contrast to and repudiation of monarchy. In one of the most explicit repudiations of monarchy, the Constitution forbids the grant of "titles of nobility" by both the federal government and the states (Constitution of the United States, Article I, sections 9 and 10). See The Federalist Papers Number 39 for James Madison's statements on the "most decisive" importance of the ban on titles of nobility (Library of Congress 1961, 242).
Interestingly, however, the Constitution does not directly forbid hereditary office, provided that the "inheritor" of the office is elected to it or appointed to it by Constitutional means. For example, early in the nineteenth century the nation elected John Quincy Adams, son of the second president, as its sixth president. Dal Bo, Dal Bo, and Snyder (2009) carefully examine U.S. Congressional dynasties from 1789 to 1996 and find that political power in the United States is self-perpetuating. This seems not only contrary to our nation's fundamental political principles but it also seems to hand over opportunities for rent-seeking to relatives of successful politicians. Furthermore, it is inefficiently anticompetitive because under such a system many highly qualified candidates are frozen out of office for reasons other than qualifications and anticipated productivity in office. Thus, at first glance, this process of family privilege in politics appears repugnant and contrary to the republican principles of our national political system.
There are, however, at least two other views of inherited political privilege which see it as socially useful. First, it is possible that political skills are actually inheritable, so that dynastic political privilege may be socially productive. That is, relatives of office holders may gain special access to knowledge and skills that is only available to other potential office holders at much higher cost, if at all. The second, and perhaps more important, way in which inherited political privilege could be socially productive is that it may mitigate public sector principal-agent problems. The political system of the United States presents substantial principal-agent problems, as the voters cannot directly control the behavior of incumbent officials. This gives office holders opportunities to act against the voters' interests through corruption, shirking, on-the-job consumption at public expense, promoting narrow ideology, and others. Dynastic political privilege may make these behaviors more costly. The possibility that opportunistic behavior in office may damage other family members' political prospects disciplines current office holders, making them more likely to exercise care in serving their constituents' interests.
The main mechanism for voters to discipline incumbents is through elections. …