Political competition and corruption
Review: bureaucratic competition
o Possibly drive bribes for service down to zero
o Possibly drive bureaucrats to steal service from government to sell at belowmarket price
o What will be outcome of political competit
How can we increase capacity?
Strengthening State Capability: The Role of Financial Incentives in a Call for Public Service
(Dal Bo, Ernesto et al. 2012.)
Subject: recruitment drive for public sector positions in Mexico
Goal: Measure candidate qu
17 November 2016
Corruption is detrimental to economic growth because it lowers investment, creates
obstacles against innovation, and produces barriers to entry into markets. Developing countries
are particularly vulnerable to the negative impact
Do we need the state for good governance?
Review: what governments are for
Provide public goods
Enforce pro-social behavior
Question: can non-governmental actors perform the same functions?
o i.e. NGOs, religious organizations, aid organizations
What they Did: examined the performance differences between younger and older
democracies. Keefer measured the age of democracies based on the presence of competitive
elections, specifically using the 7-point Legislative and Executive Indi
Is Corruption Harmful?
Corruption can keep a poor country poor
Argument: Corruption is good for growth?
o Corruption is beneficial where regulations are onerous and government is
o Makes things faster and cheaper ("greasing the wheels)
22 September 2016
Developing nations can increase their capacity by attracting highly qualified prosocial
candidates to public sector occupations. Low capacity governments lack the financial,
institutional or industrial resources necessary to d
20 October 2016
Politicians choose to use clientelism as a means of securing office when the winning
coalition is small compared to the selectorate, when the voting environment is shrouded in severe
information constraints, and when
What works to solve the problem of low government capacity?
Solidary groups any kind of group where people have something in common
o Mexico article: group based off of traditional cultural heritage
o Form a local collective in place of political governm
What causes corruption?
Opportunity for corruption
Anyone engaging in corruption is taking an illegal risk but believes the benefits outweigh
o Amount of money
o Need of money
o Likelihood of being caught
o Magnitude of punishment
Wages and b
The Mystery of Capital
Major stumbling block that keeps the rest of the world from benefitting from capitalism
is its inability to produce capital
Most of the poor already possess the assets they need to make a success of capitalism
o The poor save $
Clientelism and Vote Buying
Clear exchange of material goods for a specific type of voting behavior
How much effort do politicians expend to promising a preferential benefit in exchange
o An informal institution
o Conditional ex