Crisis and Reform: The 1893 Demise of Banca Romana
In: IMF Working Paper No. 17/274
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In: IMF Working Paper No. 17/274
SSRN
Working paper
In: Public choice, Band 148, Heft 1, S. 163-197
ISSN: 0048-5829
In: Public choice, Band 148, Heft 1-2, S. 163-196
ISSN: 1573-7101
This paper analyzes how corruption alters policy decisions in democracy, and examines whether this distortion can result in a long-term persistence of corruption even when the voters are well informed and rational. By applying a citizen-candidate model of representative democracy, the paper analyzes how corruption distorts the allocation of resources between public and private consumption, altering the policy preferences of elected and nonelected citizens in opposite directions. The outcome is a reduction in real public expenditure and, if the median voter's demand for public goods is sufficiently elastic, a reduction in taxes. In this case, some citizens benefit indirectly from corruption. The paper also presents some empirical evidence that, in democratic countries, corruption results in lower tax revenue, and proceeds to show that, when this occurs, citizens anticipating a shift in preferences in favor of public expenditure may support institutions that favor corruption. This result complements the findings of other studies that have attributed the persistence of corruption in democracy to some failure on the part of the voters or the electoral system. It also bears implications for developing effective anticorruption strategies and for redefining the role that can be played by the international community. Adapted from the source document.
In: Public choice, Band 148, Heft 1-2, S. 163-196
ISSN: 1573-7101
In: IMF Working Papers, S. 1-32
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In: IMF Working Paper No. 19/211
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Working paper
In: IMF Working Paper, S. 1-42
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Working paper
In: IMF Working Paper No. 19/146
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In: IMF Working Paper No. 17/73
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Working paper