On the Existence of Political Corruption

Enriqueta Aragones, Javier Rivas and Aron Toth
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Enriqueta Aragones: Institut d'Anàlisi Económica-CSIC and Barcelona GSE
Javier Rivas: University of Bath
Aron Toth: University of Bath

No 67/17, Department of Economics Working Papers from University of Bath, Department of Economics

Abstract: Political competition in proportional representation system between an honest (welfare maximiser) and corrupt politicians is studied. We analyse an environment where the corrupt politician is at a distinct disadvantage: there is no asymmetric information, no voter bias and voters are fully rational. Yet, corruption cannot be eliminated when voters have heterogeneous preferences. Moreover, the corrupt politician can win the majority, as the honest politician tries to trade off the cost of eliminating corruption (matching the corrupt politician's offer and thereby deviating from the socially desirable political platform) with its benefits.

Date: 2017-11-24
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