Contests, Common Agency, and Corruption: Why the Green Candidate Seldom Wins

Matthew Oliver and Jason Shogren

Strategic Behavior and the Environment, 2015, vol. 5, issue 2, 87-109

Abstract: Public sector corruption has been linked to resource dependency and environmental degradation in the developing world. Herein, we examine the persistence of public sector corruption by modeling an elected public official with the power to set agricultural/resource input-subsidization policy in a developing economy. Through common agency, firms offer bribes to influence policy. A more corrupt official extracts a greater bribe. This implies in a political contest between two candidates with different propensities for corruption, the corrupt incumbent, having the greater prize at stake, always expends greater effort and is the contest favorite. The less corrupt 'green' challenger is always the contest underdog. Our results suggest that i) corruption is politically advantageous; and ii) corruption and political instability are mutually reinforcing, leading to over-harvesting and too much pollution.

Keywords: Public sector corruption; Common agency; Contest theory; Resource conversion (search for similar items in EconPapers)
JEL-codes: C72 D72 K42 Q15 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlsbe:102.00000057

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