 Instability and the Incentives for CorruptionFilipe Campante, Davin Chor and Quoc-Anh Do Working Paper from Harvard University OpenScholar 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, since 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 nonmonotonic, 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 to those in an intermediate range of stability. These results suggest that minimizing corruption may require an electoral system that features some reelection incentives, but with an eventual term limit. New Economics Papers: this item is included in nep-pol Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:qsh:wpaper:248201 Access Statistics for this paper More papers in Working Paper from Harvard University OpenScholar Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.