
Abstract
In transition and developing countries, we observe rather high levels of corruption even if they have democratic political systems. This is surprising from a political economy perspective, as the majority of people generally suffers from high corruption levels. Our model is 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 to more corruption as more voters become part of the corrupt system. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures.
Item Type: | Paper |
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Keywords: | Corruption, Financial Markets, Institutions, Development, Voting |
Faculties: | Economics Economics > Munich Discussion Papers in Economics Economics > Munich Discussion Papers in Economics > Economic Policy Economics > Munich Discussion Papers in Economics > Transition Economics Economics > Chairs > Seminar for Comparative Economics |
Subjects: | 300 Social sciences > 300 Social sciences, sociology and anthropology 300 Social sciences > 330 Economics |
JEL Classification: | D73, D72, O17 |
URN: | urn:nbn:de:bvb:19-epub-411-6 |
Language: | English |
Item ID: | 411 |
Date Deposited: | 13. Apr 2005 |
Last Modified: | 05. Nov 2020, 14:24 |