Elected politicians work as agents on behalf of the citizens of an economy. Once elected they are responsible for shaping the future socioeconomic path of a country. Therefore understanding the determinants of electoral outcomes and the incentives faced by political candidates during the election period is key in understanding the efficacy of elections in selecting the best possi- ble candidates. A functional electoral system should act as a quality filter in which low quality candidates are "weeded out" and the highest quality candidates are successful. In reality electoral systems may not select and retain the best possible candidates. The presence of incumbency advantage may lead to a dysfunc- tional system with deleterious effects for welfare. Incumbent candidates may use officeholder benefits to improve their electoral prospects. For exam- ple, incumbents typically have access to free postage, printing and greater fundraising capabilities than challengers and may use these officeholder ben- efits to gain an unfair electoral advantage. As a result, the incumbent could win the election even if the challenger is of higher quality or high quality chal- lengers may decide not to contest the election in the first place. Incumbents are also in a position to announce their policy choices before challengers. As such the incumbent may enjoy a first mover advantage which may enable the incumbent to implement their own personal policy agenda which may not represent the majority of voters. The first chapter of this dissertation empirically estimates the magnitude of the incumbency advantage in Irish elections using a regression disconti- nuity design (RDD). Ireland provides an interesting setting for the study of incumbency advantage as the rate of reelection of Irish politicians is one of the highest in the world. Moreover its electoral system of proportional repre- sentation with a single transferable vote (PR-STV) creates strong incentives for incumbent candidates to cultivate a loyal personal following. In very close elections, where there is a narrow margin of victory, it is likely that bare winners are comparable in their unobservable characteristics to bare losers. Regression discontinuity design identifies the causal effect of incum- bency by comparing the subsequent electoral outcomes of bare winners and losers. I find that incumbency causes an eighteen percentage point increase in the probability that a candidate is successful in a subsequent election. In chapter two I study open seat and incumbent-challenger elections in a model of spatial electoral competition between two policy motivated can- didates. The candidates differ with regard to non-policy related characteris- tics which are desired by voters. These may include characteristics such as charisma, charm and intelligence - collectively referred to as valence charac- teristics. I find that incumbent candidates benefit from being first movers and this allows them to generate favourable post-election policy outcomes. Policy divergence between candidates is typically greater in the incumbent challenger election compared to an open seat contest. I also show that ideo- logical shirking occurs once a candidate's valence exceeds a certain threshold as the candidate pursues her own ideology even if this is not representative of the majority of voters. In chapter three I examine the extent to which electoral selection based on candidate quality alone can account for the pattern of reelection rates in the U.S. Senate. In order to attain incumbency status a candidate has to first win an election. Therefore it is likely that incumbent candidates are of high quality due to political selection and get reelected with a high probability. As such high reelection rates are not definitive evidence of a poorly functioning electoral system. The counterfactual simulation in which candidate quality is the sole determinant of electoral success may provide a simple benchmark for the reelection rate in the absence of officeholder benefits. The simulation delivers a reelection rate which is almost identical to the observed rate prior to 1980, at around 78 percent. In the later sub- sample, quality-based selection generates a reelection rate which is seven percentage points lower than observed. The divergence in the reelection rates in the later sub-sample is consistent with the findings of vote-margin studies that indicate rising incumbency advantage due to officeholder benefits.