Why Ministerial Salaries Are Justfied

After reading a bit about incentives in Why Nations Fail I was thinking about whether high ministerial salaries are warranted.

I recall a conversation with an acquaintance about how Ministers shouldn’t be in it for the money, but rather out of a dedication to the people.

I don’t disagree with this point, in an ideal world those who hold political power will use it to improve the lives of the majority, but I think it is naive to think that we should expect all Ministers to enact policies that benefit the people out of the goodness of their hearts.

People can be altruistic or self-serving (read the Red Queen by Matt Ridley), and we cannot rule out the possibility of highly self-serving individuals coming into positions of power in government.

In such an instance, how do we disincentivise this individual from violating the principles of inclusive political and economic instutions?

Say an anonymous transport Minister is offered a shiny new Brompton bike by a CEO of a construction company in exchange for securing lucrative deals with the public transport operator. If you were a betting man, which of the below scenarios would you bet on the Minister refusing this bribe?

1. Transport Minister annual salary: $50,000
2. Transport Minister annual salary: $500,000

That is of course not to say that these incentive structures are infallible, but I believe high ministerial salaries are one effective facet of a multi pronged approach in building such an incentive structure.