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Political economy of anti-corruption reform in two-candidate elections

  • Evrenk, Haldun

We analyze the effectiveness of some commonly discussed anti--corruption reforms on political corruption, using a theoretical model of competition between two candidates in a probabilistic voting setup. Candidates, who may differ both in their ability to produce the public good, and popularity with voters, propose a tax rate and a public good level. 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 identify the conditions under which constitutional constraints on policies, higher penalties for corruption, and higher wages for elected politicians increase (or decrease) voters' welfare. We discuss how the asymmetric information and the rigidity of constitutions reduce the effectiveness of the reforms, and how distributional effects of reforms may reduce the voters' support for a welfare--improving reform. Finally, we argue that effective reforms may not be proposed by both corrupt and honest politicians.

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File URL: http://mpra.ub.uni-muenchen.de/1958/1/MPRA_paper_1958.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1958.

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Date of creation: Oct 2002
Date of revision: Jul 2006
Handle: RePEc:pra:mprapa:1958
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  1. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
  2. Francesco Caselli & Massimo Morelli, 2000. "Bad politicians," Discussion Paper / Institute for Empirical Macroeconomics 134, Federal Reserve Bank of Minneapolis.
  3. AlÌcia Adserý, 2003. "Are You Being Served? Political Accountability and Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(2), pages 445-490, October.
  4. Besley, Timothy & Smart, Michael, 2007. "Fiscal restraints and voter welfare," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 755-773, April.
  5. repec:cup:cbooks:9780521027922 is not listed on IDEAS
  6. repec:cup:cbooks:9780521233293 is not listed on IDEAS
  7. Michele Polo, . "Electoral competition and political rents," Working Papers 144, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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