Econometric Society 57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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PLATA O PLOMO?: BRIBES AND THREATS IN A THEORY OF BAD POLITICIANS


Category: Economic Theory
Corruption
Wednesday 28th August 2002, 09:30 - 11:00, Room: 4.9
Session Chair(s): Ernesto Dal Bó, University of Oxford, UNITED KINGDOM

Presenter(s): Dal Bó, Ernesto

Co-Author(s): Dal Bó, Pedro and Di Tella, Rafael

Keyword(s): Lobbying, Political Influence, Quality of Policymakers, Threats

JEL(s): D72, D78

Abstract:

We present a model where, in addition to bribes, pressure groups use punishments to influence policy. Thus, capture can generate not only distorted decisions and more wasteful activities but also worse politicians. Equilibrium punishment makes rewards to public life lower, so society can be supply-constrained of good quality policymakers. In contrast to previous literature, returns to working in the public sector fall as pressure groups become more active and gain influence. An empirical prediction is that higher violence is associated with worse politicians, and both can be correlated with more frequent corruption.


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Paper Reference Number: 1479

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57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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