Political Competition, Ideology and Corruption

43 Pages Posted: 30 Jan 2008  

Aristotelis Boukouras

University of Leicester

Kostas Koufopoulos

University of Warwick - Finance Group

Date Written: January 27, 2008

Abstract

This paper presents a model of political competition, where voter decisions are affected by their ideological adherence to political parties. We derive a number of interesting results: First, we show that an equilibrium exists even though voting is fully deterministic. Second, corruption and inefficiencies arise as endemic phenomena of the political system. Third, if the distribution of ideology is asymmetric, then political contesters may follow different platforms in equilibrium. Fourth, political instability is desirable for selfish politicians, irrespectively of their risk aversion, because it weakens competition and becomes a natural base for rent-extractive policies. Finally, the higher the ideological adherence to a political party the more inefficient policies this party will follow. Some of these predictions are consistent with the results obtained by various empirical studies, while the rest, to the best of our knowledge, have not been tested yet.

Keywords: corruption, political instability, voting behavior

JEL Classification: G21, G28, H32, P16, P43

Suggested Citation

Boukouras, Aristotelis and Koufopoulos, Kostas, Political Competition, Ideology and Corruption (January 27, 2008). Available at SSRN: https://ssrn.com/abstract=1087777 or http://dx.doi.org/10.2139/ssrn.1087777

Aristotelis Boukouras (Contact Author)

University of Leicester ( email )

University Road
Leicester, LE1 7RH
United Kingdom

Kostas Koufopoulos

University of Warwick - Finance Group ( email )

Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain

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