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A principal-agent model of corruption

Abstract

One of the new avenues in the study of political corruption is that of neo-institutional economics, of which the principal-agent theory is a part. In this article a principal-agent model of corruption is presented, in which there are two principals (one of which is corrupting), and one agent (who is corrupted). The behaviour of these principals and agent is analysed in terms of the costs and benefits associated with different actions. The model is applied to political corruption in representative democracies, showing that, contrary to common belief, the use of principal-agent models is not limited to bureaucratic corruption.

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Groenendijk, N. A principal-agent model of corruption. Crime, Law and Social Change 27, 207–229 (1997). https://doi.org/10.1023/A:1008267601329

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Keywords

  • Representative Democracy
  • Electoral Competition
  • Political Corruption
  • Negative Incentive
  • Failure Cost