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Corruption as a political control device: Enforceable vulnerability and coalition breakdown

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  • Zhang, Xiaodong

Abstract

This paper develops a political economy model in which corruption enhances political control by generating enforceable vulnerability. We conceptualize corruption as a “hostage technology”: by allowing officials to accumulate incriminating evidence, the ruler ensures that elites remain strategically fragmented and vulnerable to selective punishment. We formalize this mechanism through a coordination game of political challenge and derive a risk-dominance threshold for coalition formation. A central theoretical result is the non-monotone effectiveness of enforcement: while moderate enforcement deters political challenges, excessively strong enforcement can paradoxically undermine political control by eliminating the very leverage — incriminating evidence — needed to discipline elites. The model yields sharp comparative statics linking tolerated corruption, enforcement capacity, monitoring technology, and political threat, providing a unified theoretical explanation for the coexistence of systemic corruption and durable political stability.

Suggested Citation

  • Zhang, Xiaodong, 2026. "Corruption as a political control device: Enforceable vulnerability and coalition breakdown," Economics Letters, Elsevier, vol. 267(C).
    • Handle: RePEc:eee:ecolet:v:267:y:2026:i:c:s0165176526002673
    DOI: 10.1016/j.econlet.2026.113073
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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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