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A Duopoly Model of Political Agency with Applications to Anti-Corruption Reform

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  • Evrenk Haldun

    (Suffolk University, haldun.evrenk@gmail.com)

Abstract

Using a theoretical model of political competition between two candidates who could differ in their (unverifiable) ability to produce public good, popularity, and ethics, I study the effectiveness of three commonly discussed anti-corruption reforms (higher salaries, higher penalties, and constitutional constraints on fiscal policy). In the model, each candidate proposes an income tax rate and a public good level. The difference between the collected taxes and the cost of public good is stolen by the elected politician. The voting decision is probabilistic. I show that under certain conditions each reform could increase the level of corruption or reduce the voter's welfare through other channels.

Suggested Citation

  • Evrenk Haldun, 2009. "A Duopoly Model of Political Agency with Applications to Anti-Corruption Reform," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-38, December.
    • Handle: RePEc:bpj:bejtec:v:9:y:2009:i:1:n:40
    DOI: 10.2202/1935-1704.1475
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    References listed on IDEAS

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    Cited by:

    1. Evrenk, Haldun, 2011. "Why a clean politician supports dirty politics: A game-theoretical explanation for the persistence of political corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 498-510.

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