Economics Dictionary of Arguments

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Corruption: Corruption is the abuse of power for personal gain. It can happen in any sector, but it is most common in politics and business.
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Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

 
Author Concept Summary/Quotes Sources

Constitutional Economics on Corruption - Dictionary of Arguments

Parisi I 209
Corruption/Constitutional Economics/Voigt: Gerring and Thacker (2004)(1) find that parliamentary systems suffer from significantly less corruption than do presidential ones. They argue (2004(3), p. 314) that "effective accountability arises from a highly structured relationship between voters and political parties and from the relatively clear lines of authority instituted by a centralized political apparatus." Lederman, Loayza, and Soares (2005)(2) also find that parliamentary systems suffer less from corruption than do presidential ones and also draw on the concept of accountability to explain why. Their argument is that parliamentary systems "allow for a stronger and more immediate monitoring of the executive by the legislature... " They conclude that after "political institutions are accounted for, variables usually found to be important determinants of corruption… lose virtually all their relevance." In his survey, Treisman (2007)(3) replicates these results but finds that presidentialism becomes insignificant as soon as one controls for Catholicism or when a dummy for South America is included.
Parisi I 210
Geography/history: In a recent study, Cheibub, Elkins, and Ginsburg (2013)(4) find a large degree of heterogeneity across the characteristics usually attributed to the forms of government and conclude (2013(4), p. 3): "Indeed, knowing whether a constitution is parliamentary, presidential or semi-presidential is less helpful in predicting a constitution's executive-legislative structure ... than is knowing the geographic region in which the constitution was produced or when it was written." Cf. >Judiciary/Constitutional economics
, >Federalism/Constitutional Economics.
Parisi I 211
Corruption: To the question of whether corruption is more prevalent under federal or unitary constitutions, there is one standard answer: constituent governments are closer to the people, play infinitely repeated games with local constituents, and hence are subject to local capture (see, e.g., Tanzi, 2000)(5). Therefore, corruption levels will be higher under federal than under unitary constitutions.
Vs: The standard argument against the local capture hypothesis is that the behavior of constituent governments is more transparent in federations and politicians are, hence, more accountable for their actions. This would imply that corruption is lower under federal constitutions.
Additionally, corruption can signal an inadequacy in the relevant rule system; under dysfunctional rules, even welfare- enhancing activities will often require corrupt behavior. This assumption leads to the argument that since the constituent units of federal states are closer to the people, it is likely that their rules will be more adequate than those in unitary states. >Direct Democracy/Constitutional economics.

1. Gerring, J. and S. Thacker (2004). "Political Institutions and Corruption: the Role of Unitarism and Parliamentarism." British Journal of Political Science 34:295—330.
2. Lederman, D., N. Loayza, and R. Soares (2005). "Accountability and Corruption." Economics and Politics 17(1): 1-35.
3. Treisman, D. (2007). "What have We Learned About the Causes of Corruption from Ten Years of Cross-National Empirical Research?" Annual Review of Political Science 10: 211-244.
4. Cheibub, J., Z. Elkins, and T. Ginsburg (2013). "Beyond Presidentialism and Parliamentarism." British Journal of Political Science 44(3):515-544.
5. Tanzi, V. (2000). "Some politically incorrect Remarks on Decentralization and Public Finance," in J.-J. Dethier, ed., Governance, Decentralization and Reform in China, India and Russia, 47-63. Boston, MA: Kluwer.

Voigt, Stefan. “Constitutional Economics and the Law”. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University

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Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
Constitutional Economics
Parisi I
Francesco Parisi (Ed)
The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017


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