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An experimental inquiry into the effect of yardstick competition on corruption:

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  • Viceisza, Angelino

Abstract

"This study reports theory-testing laboratory experiments on the effect of yardstick competition on corruption. The results reveal that on the incumbent's side, yardstick competition acts as a corruption-taming mechanism only if the incumbent politician is female. On the voter's side, voters focus on the difference between the tax rate in their own jurisdiction versus that in another jurisdiction. If the voters' tax rate is deemed unfair compared to that in the other jurisdiction, voters are less likely to re-elect. These findings support the claim by Besley and Case (1995) that incumbent behavior and tax setting are tied together through the nexus of yardstick competition, suggesting that our laboratory experiments have some external validity." from Author's Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 774.

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Date of creation: 2008
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Handle: RePEc:fpr:ifprid:774

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Keywords: Corruption; Yardstick competition; Political agency; Asymmetric and private information; Experiments; Social protection; Institutions;

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References

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  1. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2007. "Leading-by-example and signaling in voluntary contribution games: An experimental study," Open Access publications from Tilburg University urn:nbn:nl:ui:12-302954, Tilburg University.
  2. Harsanyi, John C., 1994. "Games with Incomplete Information," Nobel Prize in Economics documents 1994-1, Nobel Prize Committee.
  3. Potters, J.J.M. & Rockenbach, B. & Sadrieh, A. & Damme, E.E.C. van, 2003. "Collusion under Yardstick Competition: An Experimental Study," Discussion Paper 2003-97, Tilburg University, Center for Economic Research.
  4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  5. BELLEFLAMME, Paul & HINDRIKS, Jean, 2002. "Yardstick competition and political agency problems," CORE Discussion Papers 2002029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
  7. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  8. Miller, Ross M & Plott, Charles R, 1985. "Product Quality Signaling in Experimental Markets," Econometrica, Econometric Society, vol. 53(4), pages 837-72, July.
  9. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
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  11. Dilip Mookherjee & Pranab Bardhan, 2005. "Decentralization, Corruption And Government Accountability: An Overview," Boston University - Department of Economics - Working Papers Series WP2005-023, Boston University - Department of Economics, revised Jun 2005.
  12. Lockwood, Ben, 2005. "A Note on the Hybrid Equilibrium in the Besley-Smart Model," The Warwick Economics Research Paper Series (TWERPS) 727, University of Warwick, Department of Economics.
  13. Smith, Vernon L, 1989. "Theory, Experiment and Economics," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 151-69, Winter.
  14. Klaus Abbink, 2006. "Laboratory experiments on corruption," Monash Economics Working Papers archive-38, Monash University, Department of Economics.
  15. Browning, Edgar K, 1976. "The Marginal Cost of Public Funds," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 283-98, April.
  16. Brit Grosskopf & Rajiv Sarin, 2010. "Is Reputation Good or Bad? An Experiment," American Economic Review, American Economic Association, vol. 100(5), pages 2187-2204, December.
  17. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November.
  18. Libor Dušek & Andreas Ortman & Lubomír Lízal, 2005. "Understanding Corruption and Corruptibility Through Experiments," Prague Economic Papers, University of Economics, Prague, vol. 2005(2), pages 147-162.
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