Corruption and political marketing: a game theoretical approach

Abstract

We consider a game between a non-benevolent incumbent politician and a bu-reaucrat, where both can illegally appropriate public resources. The corrupt politician uses the resources to finance political campaigns and the bureaucrat to buy goods and services. Any illegal withdraw from the treasury diminishes the politician’s capability to improve social welfare. Politicians care about votes, bureaucrats care about money, and voters care about social welfare and are influenced by campaigns. We analyze the role of society’s educational level and of different punishing structures. We find that: i) an ill suited punishing scheme may increase state capture corruption; ii) the more educated the politician’s constituency is, the less lenient to corruption she will be; and iii) the more sensitive to marginal increases in corruption the punishing structure is, the smaller both players’ optimal illegal appropriation.