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

  • Haldun Evrenk

    (Suffolk University)

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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File URL: http://128.118.178.162/eps/game/papers/0507/0507005.pdf
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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
Contact details of provider: Web page: http://128.118.178.162

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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. repec:cup:cbooks:9780521027922 is not listed on IDEAS
  4. repec:cup:cbooks:9780521233293 is not listed on IDEAS
  5. Michele Polo, . "Electoral competition and political rents," Working Papers 144, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  6. 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.
  7. J. Mark Payne & Carles Boix & Alícia Adserà, 2000. "Are You Being Served?: Political Accountability and Quality of Government," IDB Publications (Working Papers) 6478, Inter-American Development Bank.
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