Do leaders maximise their personal income when in power?

National leaders are able to a greater or lesser extent to influence the amount they are paid. If they are principally self-serving, they will attempt to increase their salaries and other remuneration as much as possible. The exact level of influence that they can exert will depend on the strength of oversight by independent bodies, how much power is concentrated in the executive compared with the legislature, how accountable they are to the public, and how concerned people are about their activities. Thus, the effect of their own activities could show up as a small increase in their wages.

Assessing whether leaders are income maximising is difficult because self-servingness is a hidden quality. We do have two probable correlated quantities, although the correlation may be weak: the level of wages and the leader's political attitudes. Assuming that the major shared influence is self-servingness and that other shared influences have smaller joint effects, we can determine using this instrumental variable approach whether self-servingness is revealed through an effect on their wages.

There is a problem with quantifying political attitudes to calculate such a relation. Informally inspecting some of the most publicised low leader incomes suggests that a strong socialist background may be significant. According to public figures (to be taken cautiously) the leader of Bolivia earned $21,600 in 2007 (here) and the leader of Russia earned $81,000. By comparison, the rich country leaders were paid $200,000 and over, rising to $2 million in Singapore. In Africa, former left-leaning leaders in Burkina Faso and Tanzania both famously were reported to have restricted governmental incomes and benefits.

The cases of Russia and Bolivia are particularly notable because they are resource-rich petroleum exporters, so government officials have unusual potential to enrich themselves. Their leaders' incomes may be underreported, although neither has been reported to own vast material assets as far as I am aware. There is thus evidence that personal attitudes may exert an influence on how much leaders get paid, and that it is not inevitable that they will act to enrich themselves.