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The B.E. Journal of Economic Analysis & Policy

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Endogenous Corruption in a Federation

Alexander Plekhanov
  • 1Faculty of Economics, University of Cambridge,
Published Online: 2007-04-16 | DOI: https://doi.org/10.2202/1935-1682.1617


The paper shows that corruption at the federal level may be contagious for regional governments suggesting that federal structure of the government may be one of the reasons for persistence of corruption. The analysis reveals that well-informed voters may rationally forego their chance to elect a benevolent government and vote for rent-seeking politicians instead. Whereas most models of the political rent seeking in a federation make assumptions about exogenous and independent levels of capture of the central and regional governments the present paper endogenizes the incidence of corruption in a federation.

Keywords: fiscal federalism; corruption; rent seeking; regional government; elections

Published Online: 2007-04-16

Citation Information: The B.E. Journal of Economic Analysis & Policy. Volume 7, Issue 1, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.1617, April 2007

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