Corruption for competence

Abstract

When do citizens tolerate corrupt, but competent, politicians? This paper formally establishes conditions under which citizens trade off corruption for competence. First, the regime has to be sufficiently democratic such that a corrupt politician has to be acceptable to a large enough coalition of citizens in order to stay in power. Second, institutions are such that the politician can more easily obtain rents by taking bribes in exchange for spending revenues on public goods, rather than by stealing the revenues outright: the former case can generate more public goods than the latter. Under these two conditions, competence sustains corruption, and vice-versa.