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Mackerels in the Moonlight: Corrupt Politicians and Anti- Corruption Reform in Two-Candidate Elections

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Author Info
Haldun Evrenk (Suffolk University)

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Abstract

This paper examines causes of the persistence of corruption among elected politicians and the effectiveness of some commonly discussed anti-corruption reforms. We study a theoretical model of competition between two candidates who differ both in ability and popularity in a probabilistic voting setup. Each candidate proposes a tax rate and a public good level. The elected candidate's ability determines the cost of producing the public good. The budget constraint implies that taxes collected must equal the sum of funds used in public good production plus funds stolen by the elected politician. We solve for the tax rate and public good level chosen by each candidate and how much each candidate decides to steal. We then identify conditions under which (i) imposing constitutional constraints such as tax rate (upper) or public good (lower) limits, (ii) increasing compensation of elected politicians, and (iii) small changes in legal penalties, will reduce corruption and increase voters' welfare. We find that the designers of a successful reform need to have information that is privately held by candidates. The redistributive effects of a reform and how that would affect the popularity of the reform is discussed as well. Finally, we argue that a welfare-improving reform that would reduce the corruption may not be supported by both corrupt and honest politicians.

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Publisher Info
Paper provided by EconWPA in its series Game Theory and Information with number 0507005.

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Length: 48 pages
Date of creation: 12 Jul 2005
Date of revision:
Handle: RePEc:wpa:wuwpga:0507005

Note: Type of Document - pdf; pages: 48
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Web page: http://129.3.20.41

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Related research
Keywords: corruption; reform; constitutional limits;

Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D8 - Microeconomics - - Information, Knowledge, and Uncertainty

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Francesco Caselli & Massimo Morelli, 2001. "Bad Politicians," NBER Working Papers 8532, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Alicia Adsera & Carles Boix & Mark Payne, 2000. "Are You Being Served?: Political Accountability and Quality of Government," RES Working Papers 4241, Inter-American Development Bank, Research Department. [Downloadable!]
    Other versions:
  3. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn. [Downloadable!] (restricted)
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