Electoral systems, competition, and incentives for corruption

Abstract

What is the effect of electoral rules on political corruption? While the influence of electoral systems on accountability and representation has been widely studied, the link between electoral systems and corruption remains sparse. This paper develops a model for the interplay between corruption and electoral rules, considering the incentives for challengers to expose the corruption undertaken by the incumbents. I identify two major components: first, rules that increase competition create incentives for freeriding, as challengers would prefer that other challengers pay the cost of exposure. Second, larger district sizes create coordination problems, as the same incumbent may be overexposed, while others were not exposed at all. These characteristics make a mix of high competitiveness and PR the worst system regarding incentives for corruption. I show that these predictions hold empirically using quasi-experimental data from Brazilian municipalities. This study has implications for the design of electoral institutions.