The secret to success in local politics: steal from the people, but not too much

In a new paper in Progress, Oxford economist Vuk Vukovic argues that the key to re-election in local politics is to be just corrupt enough: giving lucrative contracts and other benefits to special interests who'll fund your next campaign, but not so much that the people refuse to vote for you.

Vukovic draws on a data-set of local government procurements in Croatia between 2009 and 2013 to evaluate exactly how corrupt a local politician needed to be to maximize their chance of re-election.

The conclusion of the theoretical and empirical analysis is that long-term political survival depends
on the how successful politicians are in creating mutually dependent networks of interests
with quasi-entrepreneurs where electoral support is exchanged for favorable procurement contracts.
The empirical section confirms a positive, yet concave relationship between corruption
and reelection, where the probability of reelection is maximized for around a fifth of all procurements
allocated in a potentially fraudulent way. When about half of all procurements are
allocated this way, the politician loses elections. The voters thus do punish corrupt behavior,
but only when corruption becomes too rampant and too obvious.

The paper further observes this relationship in first-round and second-round races for mayoral
elections. In first-round races more corrupt incumbents have a higher probability of winning,
while for second-round races less corrupt incumbents had greater chances of securing reelection.
Essentially this implies that the positive relationship between corruption and reelection holds in
first-round races, however if mayors are facing a second-round election, particularly if it were a
close election, they are better off if they were less corrupt during their term. The paper also
finds that more experienced mayors steal more, and that higher levels of corruption occur in
environments with small winning coalitions, as predicted by the selectorate theory (Bueno De
Mesquita et al, 2005).

Corruption improves re-election chances: How much can politicians steal before being punished?

[Vuk Vukovic/Progress]

(via Naked Capitalism)