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Corruption and Power in Democracies

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  • Francesco Giovannoni

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Abstract

According to Acton: "Power corrupts and absolute power corrupts absolutely". We study the implications of Acton's dictum in models where citizens vote (for three parties) and governments then form in a series of elections. In each election, parties have fixed tastes for graft, which affect negotiations to form a government if parliament hangs; but incumbency changes tastes across elections. We argue that combinations of Acton's dictum with various assumptions about citizen sophistication and inter-party commitments generate tight and testable predictions which describe plausible dynamics of government formation in an otherwise stationary environment.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 12/624.

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Length: 33 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:bri:uobdis:12/624

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Keywords: Corruption; Incumbency; Government Formation;

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References

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  1. Siddhartha Bandyopadhyay & Kalyan Chatterjee & Tomas Sjostrom, 2009. "Pre-electoral Coalitions and Post-election Bargaining," Departmental Working Papers 200908, Rutgers University, Department of Economics.
  2. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  3. Ansolabehere, Stephen & Snyder, James M, Jr, 2000. " Valence Politics and Equilibrium in Spatial Election Models," Public Choice, Springer, vol. 103(3-4), pages 327-36, June.
  4. Robert E. Goodin & Rupert Sausgruber & Werner Güth, . "When to Coalesce: Early versus Late Coalition Announcement in an Experimental Democracy," Papers on Strategic Interaction 2005-10, Max Planck Institute of Economics, Strategic Interaction Group.
  5. Cristina Bicchieri & John Duffy, 1997. "Corruption Cycles," Political Studies, Political Studies Association, vol. 45(3), pages 477-495.
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  7. Esther Hauk & Maria Sáez, 1999. "On the cultural transmission of corruption," Economics Working Papers 392, Department of Economics and Business, Universitat Pompeu Fabra.
  8. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  9. Tim Besley & Stephen Coate, . ""An Economic Model of Representative Democracy''," CARESS Working Papres 95-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  10. David P. Baron & Daniel Diermeier, 2001. "Elections, Governments, And Parliaments In Proportional Representation Systems," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 933-967, August.
  11. Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  12. Alesina, Alberto & Rosenthal, Howard, 1996. "A Theory of Divided Government," Econometrica, Econometric Society, vol. 64(6), pages 1311-41, November.
  13. Diermeier, Daniel & Merlo, Antonio, 2004. "An empirical investigation of coalitional bargaining procedures," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 783-797, March.
  14. Lorenzo Pellegrini & Reyer Gerlagh, 2008. "Causes of corruption: a survey of cross-country analyses and extended results," Economics of Governance, Springer, vol. 9(3), pages 245-263, July.
  15. Stefan Krause & Fabio Mendez, 2007. "Corruption and Elections: An Empirical Study for a Cross-section of Countries," Emory Economics 0709, Department of Economics, Emory University (Atlanta).
  16. Francesco Giovannoni & Daniel J. Seidmann, 2008. "Corruption and Power in Democracies," The Centre for Market and Public Organisation 08/192, Department of Economics, University of Bristol, UK.
  17. 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.
  18. Roger B. Myerson, 2006. "Bipolar Multicandidate Elections with Corruption," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 727-742, December.
  19. Seidmann, Daniel J., 2008. "Perverse committee appointments may foster divide and rule," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 448-455, April.
  20. David Baron & Daniel Diermeier & Pohan Fong, 2012. "A dynamic theory of parliamentary democracy," Economic Theory, Springer, vol. 49(3), pages 703-738, April.
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  22. Baron, David P. & Diermeier, Daniel & Fong, Pohan, 2007. "Policy Dynamics and Inefficiency in a Parliamentary Democracy with Proportional Representation," Research Papers 1960, Stanford University, Graduate School of Business.
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Cited by:
  1. Francesco Giovannoni, 2012. "Corruption and Power in Democracies," Bristol Economics Discussion Papers 12/624, Department of Economics, University of Bristol, UK.
  2. Testa, Cecilia, 2012. "Is polarization bad?," European Economic Review, Elsevier, vol. 56(6), pages 1104-1118.

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