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Endogenous Corruption in a Federation


  • Plekhanov Alexander

    () (Faculty of Economics, University of Cambridge)


The paper shows that corruption at the federal level may be contagious for regional governments suggesting that federal structure of the government may be one of the reasons for persistence of corruption. The analysis reveals that well-informed voters may rationally forego their chance to elect a benevolent government and vote for rent-seeking politicians instead. Whereas most models of the political rent seeking in a federation make assumptions about exogenous and independent levels of capture of the central and regional governments the present paper endogenizes the incidence of corruption in a federation.

Suggested Citation

  • Plekhanov Alexander, 2007. "Endogenous Corruption in a Federation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-31, April.
  • Handle: RePEc:bpj:bejeap:v:7:y:2007:i:1:n:20

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    1. repec:cup:apsrev:v:68:y:1974:i:02:p:707-716_11 is not listed on IDEAS
    2. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    3. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
    4. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    5. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    6. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers Archive 1629, Iowa State University, Department of Economics.
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