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An experimental inquiry into the effect of yardstick competition on corruption

Author

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  • Angelino Viceisza
Abstract
This study reports theory-testing laboratory experiments on the effect of yardstick competition on corruption. On the incumbent side, yardstick competition acts as a corruption-taming mechanism if the incumbent politician is female. On the voter side, voters focus on the difference between the tax rate in their own jurisdiction and that in another. If the tax rate is deemed unfair compared to the one in another jurisdiction, voters re-elect less. The findings support the claim by Besley and Case (1995) that incumbent behavior and tax setting are tied together through the nexus of yardstick competition. This renders generalizability to these laboratory experiments and addresses some concerns raised by Levitt and List (2007).

Suggested Citation

  • Angelino Viceisza, 2007. "An experimental inquiry into the effect of yardstick competition on corruption," Experimental Economics Center Working Paper Series 2007-09, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:exc:wpaper:2007-09
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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2007-09.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Corruption; Yardstick Competition; Political Agency; Asymmetric;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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