Voter heterogeneity and political corruption

Authors: Enriqueta Aragonès, Javier Rivas and Áron Tóth

Journal of Economic Behavior and Organization, Vol. 170, 206-221, February, 2020

We show that policies that eliminate corruption can depart from socially desirable policies and this inefficiency can be large enough to allow corruption to live on. Political competition between an honest (welfare maximiser) and corrupt politicians is studied. In our model the corrupt politician is at a distinct disadvantage: there is no asymmetric information, no voter bias and voters are fully rational. Yet, corruption cannot be eliminated when voters have heterogeneous preferences.

This paper originally appeared as Barcelona GSE Working Paper 1121