On the cyclical properties of corruptions and turnover

Abstract

In this paper I study the relation between political corruption and turnover, on the one hand, and the business cycle, on the other. As a rst step in this direction, I propose a particular channel (the "golden goose eect", as Niehaus and Sukhatankar (2013) call it) through which the amount of current and expected future aggregate resources aect these two political variables: an increase in the expected future corruption opportunities leads to more cautious behavior today by the incumbents, and therefore less political turnover. If the trend compo- nent of (log) output is linear in time, the cyclical component is the only determinant of the behavior of politicians. Broadly speaking, corruption (measured as the percentage of total current resources grabbed by politicians) is procyclical. I present some rst attempts to bring these implications to the data, and the partial results would seem to provide some support for the idea that unexpected high income today, that will most likely vanish in the near future, triggers corruption and political turnover in the short run.