Strategic Behavior and the Environment > Vol 5 > Issue 2

Contests, Common Agency, and Corruption: Why the Green Candidate Seldom Wins

Matthew E. Oliver, School of Economics, Georgia Institute of Technology, USA, matthew.oliver@econ.gatech.edu Jason F. Shogren, Department of Economics and Finance, University of Wyoming, USA, jramses@uwyo.edu
 
Suggested Citation
Matthew E. Oliver and Jason F. Shogren (2015), "Contests, Common Agency, and Corruption: Why the Green Candidate Seldom Wins", Strategic Behavior and the Environment: Vol. 5: No. 2, pp 87-109. http://dx.doi.org/10.1561/102.00000057

Published: 08 Oct 2015
© 2015 M. E. Oliver and J. F. Shogren
 
Subjects
Government programs and public policy,  Environmental economics,  Public economics,  Economic Theory: Game Theory
 
Keywords
K42C72D72Q15
Public sector corruptionCommon agencyContest theoryResource conversion
 

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In this article:
1. Introduction
2. The Model
3. Discussion
4. An Extension
5. Concluding Remarks and Future Research
References

Abstract

Public sector corruption has been linked to resource dependency and environmental degradation in the developing world. Herein, we examine the persistence of public sector corruption by modeling an elected public official with the power to set agricultural/resource input-subsidization policy in a developing economy. Through common agency, firms offer bribes to influence policy. A more corrupt official extracts a greater bribe. This implies in a political contest between two candidates with different propensities for corruption, the corrupt incumbent, having the greater prize at stake, always expends greater effort and is the contest favorite. The less corrupt 'green' challenger is always the contest underdog. Our results suggest that i) corruption is politically advantageous; and ii) corruption and political instability are mutually reinforcing, leading to over-harvesting and too much pollution.

DOI:10.1561/102.00000057