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Why a clean politician supports dirty politics: A game-theoretical explanation for the persistence of political corruption

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  • Evrenk, Haldun

Abstract

Using a theoretical model of repeated political competition among two career politicians, I study the incentives of both the corrupt and clean politicians not to adopt a fully effective reform targeting political corruption. In the setup I study, each politician can credibly adopt the reform as part of his policy platform in the elections. Yet, when the level of political corruption is high, neither politician does so in a Nash Equilibrium. Intuitively, political corruption changes the zero-sum nature of political competition: the reform eliminates the illegal rents of the corrupt candidate and the competitive advantage of the clean candidate.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 80 (2011)
Issue (Month): 3 ()
Pages: 498-510

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Handle: RePEc:eee:jeborg:v:80:y:2011:i:3:p:498-510

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Web page: http://www.elsevier.com/locate/jebo

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Keywords: Political corruption; Reform; Political agency; Imperfect competition;

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  1. Jinhui Bai & Roger Lagunoff, 2007. "On the “Faustian” Dynamics of Policy and Political Power," Levine's Bibliography 122247000000001627, UCLA Department of Economics.
  2. Haldun Evrenk, 2009. "Three-candidate competition when candidates have valence: the base case," Social Choice and Welfare, Springer, vol. 32(1), pages 157-168, January.
  3. Timothy Besley & Michael Smart, 2005. "Fiscal Restraints and Voter Welfare," STICERD - Political Economy and Public Policy Paper Series 06, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  5. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
  6. Andreoni, J. & Erard, B. & Feinstein, J., 1996. "Tax Compliance," Working papers 9610, Wisconsin Madison - Social Systems.
  7. Roger B. Myerson, 1991. "Effectiveness of Electoral Systems for Reducing Government Corruption: A Game-Theoretic Analysis," Discussion Papers 956, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Francesco Caselli & Massimo Morelli, 2001. "Bad Politicians," NBER Working Papers 8532, National Bureau of Economic Research, Inc.
  9. Evrenk Haldun, 2009. "A Duopoly Model of Political Agency with Applications to Anti-Corruption Reform," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-38, December.
  10. Marco Pani, 2011. "Hold your nose and vote: corruption and public decisions in a representative democracy," Public Choice, Springer, vol. 148(1), pages 163-196, July.
  11. Asim Ijaz Khwaja & Atif Mian, 2005. "Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1371-1411, November.
  12. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
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