Corruption and Extremism

53 Pages Posted: 8 May 2020

See all articles by Tommaso Giommoni

Tommaso Giommoni

ETH Zürich

Massimo Morelli

Bocconi University

Antonio Nicolò

University of Padua - Department of Economics; University of Manchester

Multiple version iconThere are 2 versions of this paper

Date Written: April 2020

Abstract

When should we expect an opposition group to select an extremist leader or representative? This paper shows the important role of corruption for this choice. Moreover, we show an important asymmetry in the role of corruption, in that the effect on extremism exists only within the opposition group. When the elite has greater ability to use corruption to obtain a better bargaining outcome from the opposition group leader (political corruption), then the equilibrium selection of group leader is more likely to be extreme. On the other hand, the perception of an existing rent extraction by the elite in power may determine the opposite effect within the majority group. We provide strong evidence for these novel predictions using the random audits data in Brazil as exogenous corruption signals, verifying that only within the opposition (to state-level incumbents) the signals determined an extremism drift in voting. Finally, we extend the analysis to extremism and conflict risk in divided countries.

Keywords: agency, Bargaining, Corruption, delegation, extremism

JEL Classification: D72, D73

Suggested Citation

Giommoni, Tommaso and Morelli, Massimo and Nicolò, Antonio, Corruption and Extremism (April 2020). CEPR Discussion Paper No. DP14634, Available at SSRN: https://ssrn.com/abstract=3594265

Tommaso Giommoni (Contact Author)

ETH Zürich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

Massimo Morelli

Bocconi University ( email )

Via Roentgen 1
Milan, 20136
Italy

Antonio Nicolò

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy

University of Manchester ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

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