Abstract
This paper explores the role of identity in voters’ decision to retain corrupt politicians. We build up a model of electoral accountability with pure moral hazard and bring it to the lab. Politicians must decide whether to invest in a public project with uncertain returns or to keep the funds for themselves. Voters observe the outcome of the project but not the action of the politician; if the project is unsuccessful, they do not know whether it was because of bad luck or because the politician embezzled the funds. We run two treatments; a control and a treatment where subjects are assigned an identity using the minimal group paradigm. Our main result is that, upon observing a failed project, voters approve politicians of their same identity group significantly more often than in the control and compared to politicians of a different identity group. This is partially driven by a belief on same-identity politicians being more honest. We also observe that subjects acting as politicians embezzle funds less often than expected by the equilibrium prediction.
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Acknowledgements
We thank Boon Han Koh and two anonymous referees for their constructive review of the paper, and Subhasish Chowdhury, Clement Minaudier, Maria Montero, Giuseppe de Feo, Konstantinos Ioannidis, and audiences at the Universities of Bath, Brunel, Essex, Heidelberg, King’s College London, Leicester, Maryland, the Association of Southern European Economic Theorists Meeting 2022, the 13th NYU CESS Experimental Political Science Conference, and the Workshop of Experimental and Behavioral Economics of the Americas for their comments and suggestions. Funding from the University of Leicester Experimental Economic Laboratory and King’s College London is gratefully acknowledged.
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Cubel, M., Papadopoulou, A. & Sánchez-Pagés, S. Identity and political corruption: a laboratory experiment. Econ Theory (2024). https://doi.org/10.1007/s00199-024-01589-2
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DOI: https://doi.org/10.1007/s00199-024-01589-2