Corruption vs reforms: Why do voters prefer the former?

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we address the question of why voters tolerate corrupt politicians. Standard economic techniques such as expected utility maximization under uncertainty are employed. We show that a corrupt politician is less likely to institute reforms which can cause short-term losses for voters during a transitional period or lead with some probability to non-success. Voters' higher risk aversion causes an increased fear of reforms and higher tolerance for corruption. We also show that during an economic crisis the corruptionists' optimal strategy is not to institute reforms, as models with honest politicians predict, but to reduce the level of corruption. Using panel data techniques, we show that such a strategy is in line with the empirical CIS data; however, it follows with a short delay.

Keywords: Corruption; politician; median voter; reforms; risk aversion (search for similar items in EconPapers)
JEL-codes: D72 D73 D79 E60 I38 O43 (search for similar items in EconPapers)
Date: 2018-10-18
New Economics Papers: this item is included in nep-cdm, nep-mac, nep-pol and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89581

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