A Theory of the Corrupt Keynesian

We evaluate the impact of real business cycle shocks on corruption and economic policy in a model of entry regulation in a representative democracy. We .nd that corruption is procyclical and regulation policy is counter-cyclical. Corrupt politicians engage in excessive stabilization of aggregate fluctuations and behave as if they were Keynesian. We also find that business cycle shocks can induce political instability with politicians losing office in recessions.

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Year of publication:	2008-12
Authors:	Aidt, T.S. ; Dutta, J.
Institutions:	Faculty of Economics, University of Cambridge
Subject:	Corruption \| entry regulation \| performance voting \| business cycles

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Extent:	application/pdf
Series:	Cambridge Working Papers in Economics.
Type of publication:	Book / Working Paper
Language:	English
Classification:	D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legistures, and Voting Behavior ; K42 - Illegal Behavior and the Enforcement of Law ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005783743