Absolute

Corruption
Empowers
Absolutely

Democratization

Transitioning from a Small to a Large Coalition

How

to keep the winning coalition small when the selectorate

seems to be growing? (Tanzania)
Rig election outcomes
Use appointed seats
Encourage opposition parties (to split their support)
Variation in coalition size across districts
Small coalition districts get maize vouchers
Large coalition districts get public goods

Not Democratization

Transitioning from a Large to a Small Coalition

(Russia)
Pay

Security Forces Poorly!

Encourages them to engage in corruption
Fear of being punished for corruption keeps them loyal
Ignore or punish whistle blowers

Small Coalition Regimes

IOC

& FIFA, Public Traded Corporations

Haul

of Fame: Zaires Mobuto, King Solomon, Perus

Fujimori, Siberias Milosevic, Iraqs Hussein, Ugandas
Amin, Indonesias Suharto, Philippines Marcos,
Sudans al-Bashir
!

Hall

of Shame: Russias Khrushchev and Gorbachev,

Chinas Mao Zedong
!

Hall

Yew

of Fame: Chinas Deng Xiaoping and Singapores

Discretionary Money

This

is the only money that can be spent on civic

minded projects.
!

Small

coalition leaders rarely choose to do it.

Genghis Khan as your role model?

Genghis Khan is said to have taxed 100% after a

conquest
!

If you were a dictator, would you follow his

example?
!
!
!
!

Genghis Khan as your role model?

Genghis Khan is said to have taxed 100% after a

conquest
!

If you were a dictator, would you follow his

example?
!

Not if you hope to stick around and find some

income to tax next year

If you taxed at a 100% rate, people would have no incentive

to produce anything

Roving bandits vs. stationary bandits

You are a private citizen and have to choose

between two options:
1. To live under anarchy where there are several thieves
competing with each other (roving bandit)
2. To live under a dictator that monopolizes theft in a given
territory (stationary bandit)

Which would you choose, and why?

Long live the stationary bandit

Roving bandits have no incentives to invest in the

territory

A roving bandit would just take everything you have and leave

Stationary bandits, however, have to think about

tomorrow. (Assuming they are going to survive)
!

Hence, you would be better off under a stationary

bandit with a long life span. Long live the
stationary bandit!

A bandit is a bandit is a bandit

Even the long-term thinking dictator, however,

will try to take as much as he can and share it
with his small circle of supporters
!

That is why you would be better off under a

democracy that respects the rule of law
!

Youll have property and contract rights. Chances

are also that youll enjoy some of the public
goods provided with your taxes

Controlling politicians
It is hard for a leader to know what the people
really want unless they have been chosen through
the ballot box, and allow a free media and freely
assembled groups to articulate their wishes.
!

The same is valid within countries

In the U.S., exposure to the media varies across states and

over time, with consequences for corruption

Measuring corruption

Corruption is hard to measure systematically (can you

guess why?)
!

More reports of corruption might just mean that the

press has more leeway to investigate, not that there is
more corruption
!

Ideally, youd like to compare the wealth of politicians

and that of non-politicians

In many countries, elected officials have to publish their wealth and/

or income
But un-elected officials do not > we lack a counterfactual
Politicians might differ from not politicians in many ways

Corruption in the US, 1850-1880

The 1850, 1860, and 1870 censuses report

individual wealth (no income tax yet)

You can observe the wealth accumulation of specific individuals

You can compare the enrichment of House

candidates who barely won an election to that of
candidates who barely lost

(bare winners and loser should be similar ex ante, so if their paths

diverge, you can attribute the effect to being in office)

Holding office led to unusual wealth accumulation but only between 1860 and 1865

Corruption in the US, 1850-1880

Corruption in the US, 1850-1880

For the average congressman this corresponds to

about $20,000 in additional wealth nearly $800,000
in present-day values.
!

We hypothesize that increased rent-seeking during the

Civil War years was caused by increased opportunities for
enrichment from office and by decreased control and
oversight by voters, the media and state institutions
during this period. (Querubn and Snyder 2013:413)

Committee chairs and head of military committees accumulated the

most wealth
The media paid less attention to corruption during the war

Increased opportunities

Decreased control

Still valid today? Yes!

We show that isolated capital cities are robustly

associated with greater levels of corruption across
US states, in line with the view that this isolation
reduces accountability.
!

We then provide direct evidence that []

newspapers cover state politics more when readers
are closer to the capital, voters who live far from the
capital are less knowledgeable and interested in state
politics, and they turn out less in state
elections. (Campante and Do 2014)

Corruption and accountability

The Loyalty Norm

W = winning coalitions
S = selectorate

(essentials)

W/S = Loyalty
If W is small

Norm
relative to S, the probability of being in
the next winning coalition is small. Be loyal!
If W is large relative to S, the probability of being in
the next winning coalition is greater. Be ready to defect!
Voters in democracies are ready to turn their back on
politicians in order to try someone new
What happens if they sense that corruption is
rampant?

The Virtuous Cycle

Leader

assembles a winning coalition (gets enough

votes)
Voters (selectorate) perceive corrupt practices
Voters switch loyalty to a new leader (high vote
volatility)
New leader behaves virtuously
Voters reward leader with loyalty (low vote
volatility)

The Vicious Cycle

Leader

assembles a winning coalition (gets enough

votes)
Voters (selectorate) perceive corrupt practices
Voters switch loyalty to a new leader (high vote
volatility)
New leader behaves badly (figures he might not be
around long)
Voters switch loyalty (again) to a new leader (high
vote volatility)

Test
Global

Corruption Barometer in 72 countries

To

what extent do you perceive the parliament/legislature in

this country to be affected by corruption?
Responses were recorded on a five-point scale ranging from not
at all corrupt (1) to extremely corrupt (5).

Vote
!
!
!
!

Volatility in 249 elections

Further Reading
Olson,

Mancur. Dictatorship, Democracy, and Development.

The American Political Science Review 87, no. 3 (1993): 56776.
Querubn, Pablo, and James M. Snyder. The Control of
Politicians in Normal Times and Times of Crisis: Wealth
Accumulation by U.S. Congressmen, 18501880. Quarterly
Journal of Political Science 8, no. 4 (2013): 40950.
Campante, Filipe R., and Quoc-Anh Do. Isolated Capital
Cities, Accountability, and Corruption: Evidence from US
States. American Economic Review 104, no. 8 (2014): 245681.
Crisp, Brian F., Santiago Olivella, Joshua D. Potter, and William
Mishler. 2014. Elections as Instruments for Punishing Bad
Representatives and Electing Good Ones. Electoral Studies 34:
1-15.