The Political Economy of Corruption and and the Role of Financial Institutions

Konferenzbeitrag

In transition and developing countries, we observe rather high levels of corruption even they have democratic political systems. This is surprising from a political economy perspective, as a majority of the people generally suffers from high corruption levels. Our model based on the fact that corrupt officials have to pay an entry fee to get lucrative positions. In a probabilistic voting model, we show that a lack of financial institutions can lead more corruption as more voters are part of the corrupt system. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Proceedings of the German Development Economics Conference, Kiel 2005 ; No. 6

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Bureaucracy; Administrative Processes in Public Organizations; Corruption
• Subject: Corruption ; Financial Markets ; Institutions ; Development ; Voting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hainz, Christa ; Boerner, Kira
• Event: Veröffentlichung
• (who): Verein für Socialpolitik, Ausschuss für Entwicklungsländer
• (where): Hannover
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/19799
• Last update: 10.03.2025, 11:42 AM CET