Instability and the Incentives for Corruption
Filipe Campante,
Davin Chor and
Quoc-Anh Do
Post-Print from HAL
Abstract:
We investigate the relationship between corruption and political stability, from both theoretical and empirical perspectives. We propose a model of incumbent behavior that features the interplay of two effects: a horizon effect, whereby greater instability leads the incumbent to embezzle more during his short window of opportunity, and a demand effect, by which the private sector is more willing to bribe stable incumbents. The horizon effect dominates at low levels of stability, because firms are unwilling to pay high bribes and unstable incumbents have strong incentives to embezzle, whereas the demand effect gains salience in more stable regimes. Together, these two effects generate a non-monotonic, U-shaped relationship between total corruption and stability. On the empirical side, we find a robust U-shaped pattern between country indices of corruption perception and various measures of incumbent stability, including historically observed average tenures of chief executives and governing parties: regimes that are very stable or very unstable display higher levels of corruption when compared with those in an intermediate range of stability. These results suggest that minimizing corruption may require an electoral system that features some re-election incentives, but with an eventual term limit.
Keywords: Political Stability; Political Corruption; Incumbency; Political Ethics; Public Sector; Private Sector; Bribery (search for similar items in EconPapers)
Date: 2009-03
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03459960
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)
Published in Economics and Politics, 2009, 21 (1), pp.42 - 92. ⟨10.1111/j.1468-0343.2008.00335.x⟩
Downloads: (external link)
https://sciencespo.hal.science/hal-03459960/document (application/pdf)
Related works:
Journal Article: INSTABILITY AND THE INCENTIVES FOR CORRUPTION (2009) 
Working Paper: Instability and the Incentives for Corruption (2009) 
Working Paper: Instability and Incentives for Corruption (2008) 
Working Paper: Instability and the Incentives for Corruption (2005) 
Working Paper: Instability and the Incentives for Corruption 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03459960
DOI: 10.1111/j.1468-0343.2008.00335.x
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().