IDEAS home Printed from
   My bibliography  Save this article

Electoral incentives, institutions and rent-seeking


  • Ngo Van Long
  • Bodhisattva Sengupta


Purpose - The purpose of this paper is to investigate conditions under which voters’ comparison of relative performance between adjacent jurisdictions can help reduce rent-seeking by politicians. Design/methodology/approach - A theoretical model was developed to examine the effectiveness of yardstick competition in restraining political corruption, first under a static setting, and then under a dynamic setting, using optimal control theory and differential games. It is assumed that voters compare the performance of their incumbent government with that of a neighboring jurisdiction. The incumbent can provide a public good and extract rent, which are financed by imposing a distortionary tax on the population. Politicians derive utility from rent as well as from popularity. The stock of reputation builds up or decays over time. Reputation is decreasing in rent appropriation. Findings - Without assigning an Originality/value - This paper offers the first formal analysis, using differential games, of the role of the interaction between electoral considerations and neighborhood demonstration effects (with respect to relative rent extraction) in determining a politician's optimal rent-seeking behaviour.

Suggested Citation

  • Ngo Van Long & Bodhisattva Sengupta, 2008. "Electoral incentives, institutions and rent-seeking," Indian Growth and Development Review, Emerald Group Publishing, vol. 1(2), pages 133-146, September.
  • Handle: RePEc:eme:igdrpp:v:1:y:2008:i:2:p:133-146

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:igdrpp:v:1:y:2008:i:2:p:133-146. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.