Fragmented Legislatures and the Budget: Analyzing Presidential Democracies

What impact does party fragmentation have on the likelihood of democracies to run a fiscal deficit? Past research is almost unanimous in finding that as the number of parties in a country's legislature or government grows, so does its probability of overspending. However, this finding is based largely on parliamentary systems, and there is no reason to believe that it should hold when executives are independent. In this article, I develop a theory for the impact of legislative fragmentation on budgetary politics in presidential democracies. I argue that unified presidential systems should tend most toward fiscal solvency but that increasing fragmentation should actually facilitate budget balancing when government is divided. The logic is that presidents, who are likely to prefer balanced budgets due to their broad constituencies, will be better able to craft acceptable governing coalitions from divided legislatures than from ones controlled by a single opposing party. They will also be better able to circumvent such fragmented legislatures should a coalition prove impossible. I test these propositions quantitatively in all presidential democracies from 1976 to 2007. The results provide support for the theory and highlight the contrasting impact of legislative fragmentation on public policy in presidential vs. parliamentary systems.     

The Role of the Judiciary in the Public Decision‐Making Process

Empirical work on the relationship between political corruption and the design of public institutions suggests that the structure of judiciaries is an important determinant of corruption. This study develops a simple political economic model to investigate the role of judicial oversight in the policy‐making process for corruption deterrence, focusing on two dimensions of quality of the judiciary, namely efficiency and integrity. Our analysis explicitly accounts for the possibility that, while being independent of the political authority, the judiciary itself may be vulnerable to pressure from special interests. We study endogenous policy‐making under complete information and provide general conditions for the existence of deterrence (zero‐bribe) equilibria. In particular we show that preserving the independence of judiciaries in corrupt societies proves crucial to the existence of corruption‐deterrence effects.     

Judicial Branch, Checks and Balances and Political Accountability

This paper attempts to combine the political economics models on separation of powers between the legislature and the executive with public choice theories on the behavior of the judicial branch. We obtain a model of political accountability and checks and balances with up to three government branches: the executive, the legislature and the judiciary. We conclude that an independent judiciary improves the political accountability of democratic systems relative to the political economics models with two government branches. An accommodating judiciary, however, changes the distribution of political rents without improving accountability.     

CORRUPTION AND ELECTIONS: AN EMPIRICAL STUDY FOR A CROSS-SECTION OF COUNTRIES

In this paper, we study whether voters are more likely to "vote out" a corrupt incumbent than to re-elect him. Specifically, we examine whether they retract their support from political candidates who they think are corrupt by looking at changes in an index of corruption perceptions between the current and the last elections. Our results suggest that corruption in public office is effectively punished by voters. Furthermore, our findings support the idea that both the political system and the democratic experience are important determinants of the voters' reaction and control of corruption; while voters in countries with parliamentary systems or with relatively low levels of democracy react negatively to an increase in corruption, no perceptible effect of this kind was found in countries with mature democracies, and the evidence is inconclusive in the case of countries with presidential systems.     

Are electronic government innovations helpful to deter corruption? Evidence from across the world

Electronic government innovations have been a critical development in public administration in recent years. Many countries have implemented e-government policies to enhance efficiency and transparency and combat corruption. This paper examines the impact of e-government on corruption using longitudinal data for more than 170 countries from 2002 to 2020. The empirical results suggest that e-government serves as a deterrent to corrupt activities. We analyse which e-government domains affect corruption, which types of corruption are more affected by e-government and the circumstances under which e-government is more effective in reducing corruption. The empirical results suggest that online service completion and e-participation are important features of e-government as an anticorruption tool. Evidence suggests that e-participation reduces corrupt legislature activities, public sector theft, executive bribery, and corrupt exchanges. The potential of e-government to deter corruption is higher in countries where corruption is moderate or high and economic development is lower. Higher levels of GDP per capita, foreign direct investment, and political rights are also associated with lower levels of corruption.     

How do electoral and voice accountability affect corruption? Experimental evidence from Egypt

How far does democracy decrease corruption? And which specific aspects of democracy help generate such effects? Corruption is famously one of the strongest obstacles to social and economic development. Whereas there has been extensive research identifying the causes of corruption, there is little experimental research on the impact of political institutions on corruption using designs that control for significant confounders. This paper uses a series of laboratory experiments conducted in 2013 Egypt in which a government official decides whether to spend tax revenues paid by subjects on a self-serving good or a good that benefits everyone equally. We have two experimental manipulations: (a) whether the official is electorally accountable to subjects or not; (b) whether subjects could send messages of protests to the official (and one another). We find evidence that electoral accountability does decrease the probability of the official choosing the self-serving good by 17% whereas voice accountability generates such outcome only in the authoritarian treatment (a reduction of corruption by 29%). We also find suggestive evidence that, in the authoritarian treatment, the likelihood of funding the self-serving good decreases by 27% when taxes paid by citizens fall short of the official’s threshold. Our contribution to the literature is two-fold: (a) we are able to single out the effect of specific democratic mechanisms on government corruption; (b) we test outcomes of democratic mechanisms on a traditionally understudied subject pool.     

Government size,democracy, and corruption: An empirical investigation

Previous studies on the effect of government size on corruption have produced mixed results. In an attempt to explain these ambiguous results, this study investigates the effect of government size on corruption by taking into account the role of the democracy in each country. Using annual data of 82 countries between 1995 and 2008, the estimation results indicate that an increase in government size can lead to a decrease in corruption if the democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low. As robustness checks, the estimations using a different index of corruption and a different proxy for government size are also conducted. The results reveal that our main findings are robust. Furthermore, to address endogeneity problems, we conduct the instrumental variables estimation and the system generalized method of moments estimation, the results of which also support our primary findings. These results provide some important implications for policymakers seeking to perform government interventions without aggravating corruption.     

基于行为决策理论的腐败行为分析及其治理

通过对行为决策理论的腐败选择行为模型的分析和研究,我们发现,对于面对损失具有风险偏好倾向的腐败者,虽然位卑权小时廉洁守法,升职后却可能走向腐败.而且,一个弹性的惩罚制度环境会增加行为人的违规价值预期,强化行为人逃避严惩的侥幸心理,加剧腐败行为蔓延.所以,建立科学合理的用人机制,优化监督环境,提高惩罚制度的执行力,是遏制腐败蔓延的有效手段.     

Are You Being Served? Political Accountability and Quality of Government

How well any government functions hinges on how good citizensare at making their politicians accountable for their actions.Political control of public officials depends on two factors.First, free and regular elections allow citizens to disciplinepoliticians—the credible threat of losing office in thenext period compels policy makers to respond to the voters'interests. Second, and equally important, the degree of citizeninformation curbs the opportunities politicians may have toengage in political corruption and management. The presenceof a well-informed electorate in a democratic setting explainsbetween one-half and two-thirds of the variance in the levelsof governmental performance and corruption.     

The size and scope of government:: Comparative politics with rational politicians

We try to demonstrate how economists may engage in research on comparative politics, relating the size and composition of government spending to the political system. A Downsian model of electoral competition and forward-looking voting indicates that majoritarian – as opposed to proportional – elections increase competition between parties by focusing it into some key marginal districts. This leads to less public goods, less rents for politicians, more redistribution and larger government. A model of legislative bargaining and backward-looking voting indicates that presidential – as opposed to parliamentary – regimes increase competition between both politicians and voters. This leads to less public goods, less rents for politicians, less redistribution, and smaller government. We confront these predictions with cross-country data from around 1990, controlling for economic and social determinants of government spending. We find strong and robust support for the prediction that the size of government is smaller under presidential regimes, and weaker support for the prediction that majoritarian elections are associated with less public goods.     

Judicial review and the power of the executive and legislative branches

The legal system can affect what policies a government can implement. In particular, when there is separation of powers, the strength of the judiciary to review and overturn actions of the executive and legislative branches can affect such things as how much redistribution these policy-making branches can do. Surprisingly, having judicial review helps the policy-making branches—the stronger is the judiciary, the more redistribution they are able to do. This occurs because the policy-making branches must make promises on and off the equilibrium path to individuals in order to make redistribution possible. However, in many circumstances, the government wants to renege on these promises, either to do more redistribution than promised or to not carry out severe threats against any individuals who lied. Judicial review can prevent reneging on these promises, thus making them credible.We develop this in the context of an optimal income tax model with a finite number of individuals where the government knows the exact distribution of types but not which individual is of which type. In this finite model, the government can detect misrevelation by even a single individual so that an individual׳s taxes can depend not just on one׳s own actions but also on others’ actions. Piketty (JET, 1993) showed that the government could implement any full-information Pareto optimal allocation if the government could commit to its announcements, even to infeasible allocations in circumstances after some individuals misreveal. We derive the sequential equilibrium allocations when individuals reveal their types by simple announcements when feasibility on and off the equilibrium path is imposed. Increasing the degree of judicial review expands the set of achievable allocations on the full-information utility possibility frontier. We also relate the different possible legal rules to different solution concepts in game theory.     

Financial Liberalization and Institutional Development

This study empirically analyzes the effects of de jure financial openness on institutional quality as captured by indicators on investment risk, corruption level, impartiality of judiciary system, and the effectiveness of bureaucracy. We show that a higher degree of financial openness improves institutional quality mainly by reducing investment risks. We also study the effect of a single liberalization reform. Again, we find evidence for the beneficial impact of financial liberalization with the exception of corruption. We additionally show that the benign consequences of financial opening for the institutional development are even larger if financial liberalization is supported by simultaneous political liberalization, while financial deregulation in former socialist countries tends to worsen institutional quality.     

政府公共工程招投标腐败举报研究

政府公共工程招投标领域内,参与投标人为达到自身的某种目的常常采取行贿等非法手段。这种腐败违法行为不仅严重败坏了社会风气,且给政府公共工程建设带来极大破坏。消除这种行为,除了需要相应的监管部门付出很多努力外,与招投标违法举报人的举报积极性密切相关,举报人提供的线索在查处腐败案件中起关键的作用。充分发挥举报人的积极性,是查处腐败案件的重要突破口,也是做好工程建设预防寻租腐败等发生的重点和难点。该文从政府公共工程招投标腐败举报问题出发。从举报人是否属于当事人的角度进行分类,研究了它们的异同点,并对举报人与被举报人之间利益进行博弈分析,在此基础上提出了完善政府公共工程招投标腐败举报制度的途径。得出结论是,提高举报人积极性的努力方向有两条：其一是降低举报人的举报风险;此外就是增加举报人在举报活动中的预期收益。     

Political importance and its relation to the federal prosecution of public corruption

In the US, federal prosecutors are appointed by the president, confirmed by the Senate, and have significant discretion over which cases they choose to take to court. Federal prosecutors handling an overwhelming majority of corruption cases invites the possibility of political influence in the monitoring of corruption. Additionally, political disparities across states may result in differences in corrupt behavior. Using individual case level data, I examine the effect political factors have on federal corruption cases, with an emphasis on states that are an important focus in the next presidential election. I find that corruption convictions tend to be higher in politically important states. This effect seems more significant when Democratic administrations are in power. In addition, it seems that these effects are relevant only for corruption crimes labeled as “federal”.     

The economic effects of constitutions: do budget institutions make forms of government more alike?

According to an influential theoretical argument, presidential systems tend to present smaller governments relative to parliamentary countries because the separation between those who decide the size of the fiscal purse and those who allocate it creates incentives for lower public expenditures. In practice, however, presidential and parliamentary countries come in many forms. In particular, variation in procedural rules that assign budget prerogatives across the popular branches of government may affect the underlying incentives that differentiate these types of regimes in terms of fiscal outcomes. More specifically, we argue that more hierarchical rules that concentrate budgetary power in the executive relative to the legislature do not only reduce the extent of the common pool problem but also limit the degree of separation of powers, which may have a countervailing effect. Consequently, the effect of the form of government on public expenditures is conditional on specific procedural rules. We test this hypothesis on a broad cross-section of countries and find that presidentialism has a negative impact on government size only when executive discretion in the budget process is low (that is, in a context of separation of powers). However, the negative effect of presidentialism on expenditures vanishes when the executive’s discretion over the budget process is higher. This result, in addition to highlighting that not all budget institutions have the same effect on incentives and outcomes, points out how important it is to go beyond broad characterizations of political institutions for explaining policy outcomes, and more generally, for moving forward the research agenda in constitutional political economy.     

财政分权与官员腐败——基于1999-2007年中国省级面板数据的实证研究

利用1999-2007年的省级面板数据,分析了中国地区腐败水平的决定因素,并特别关注财政分权的反腐作用。研究发现:财政分权影响地区腐败机制的多元性,财政分权能够通过推动政府规模膨胀和支出结构扭曲而加重地区的腐败水平;而在控制政府规模和支出结构的前提下,财政分权则能对地区腐败水平产生抑制作用。同时,地区人均GDP、受教育年限和开放程度都是影响地区腐败的重要因素。最后,还尝试性地给出反腐倡廉的政策建议。     

Corruption and growth: The role of governance,public spending,and economic development

This paper analyses how the quality of governance, the size of public spending, and economic development affect the relationship between bureaucratic corruption and economic growth. The analysis shows that the interaction between corruption and governance shapes the efficiency of public spending, which in turn, determines the growth effects of corruption. Specifically, corruption improves economic efficiency only when the actual government size is above the optimal level. It implies that a growth-maximising level of corruption is possible. This paper also finds that the incidence of corruption declines with economic development. This is because with economic development the wage rate rises and makes private rent seeking costs higher, thereby, discouraging corruption. The main policy implication is that targeting tax evaders instead of bureaucrats is more effective in terms of both reducing corruption and improving the growth potential of an economy.     

THE TWO‐WAY RELATIONSHIP BETWEEN GOVERNMENT SPENDING AND CORRUPTION AND ITS EFFECTS ON ECONOMIC GROWTH

The existing empirical evidence suggests that in low‐income economies, an increase in government spending leads to a reduction of growth. This article aims to explain this empirical fact by considering a growth model that incorporates a two‐way relationship between corruption and government spending. That is, government spending gives rise to corruption and rent seeking, which feeds back by distorting the structure and size of government spending. In addition, the cost of corruption depends on the wage rate. Therefore, in low‐income economies, increases in government spending tend to generate larger social losses caused by a higher level of rent dissipation and a concomitant rise in corruption and government inefficiency. Consequently, in such economies, an increase in government spending is more likely to result in a decline of economic growth. (JEL H3, O11, O41)     

二元体制下我国军民融合深度发展的法治实施困境与对策

军民融合发展是统筹经济建设与国防建设、实现富国强军与构建一体化国家战略体系和能力的必由之路。我国军民融合从初步融合走向深度融合,涉及多方主体的关系调整与利益重塑,需要在法治轨道上通过法律规范与法律运行两个维度整合各类主体力量、配置各类要素资源。目前,军民融合法治实施受制于“军”“民”二元分离体制结构的现实约束,在法律规范层面处于制度供给不完备状态,在法律运行层次面临主体实践不协调困境。二元体制下破解军民融合深度发展的法治实施困境,宜从静态规范层面和动态运行层面综合调整军民融合行为。一方面,通过适时制定和颁布具有统一效力的军民融合发展法,清理、废止和修订不适应军民融合发展需要的法律法规和政策文件,在规范层面建立健全统一完备的军民融合发展法律法规体系;另一方面,探索建立“委员会统一领导、各小组分工负责”的军民融合法治实施领导体制和统一领导、军地协调、顺畅高效的军地联合法律执行机制,形成诉调对接、诉仲结合的军民融合案件多元化纠纷解决机制暨法律适用机制,在法律运行层面建立协调高效的军民融合发展法律实施体系。     

Do rapid political and trade liberalizations increase corruption?

Corruption scandals seem to abound in countries that have undergone reform. However, there has been no study of whether different combinations of reforms cause an increase in corruption. Theory provides some guidance as to the direction of causality—on the one hand, reforms make politicians accountable to voters as well as introducing more competition, which should decrease corruption. On the other hand, reforms may not be credible, which provides for an incentive for corruption. This paper uses the numerous cases of political and economic liberalizations that occurred in the 1980s and 1990s to examine this issue. The findings are that undertaking both types of reforms in rapid succession leads to a decrease in corruption, while countries that liberalized more than 5 years after democratizing experienced an increase in corruption.