Introduction to the Special Issue on Governance and Political Economy

• Published date: 01 August 2015
• Date: 01 August 2015
• DOI: http://doi.org/10.1111/jpet.12152
• Author: AMRITA DILLON

INTRODUCTION TO THE SPECIAL ISSUE ON GOVERNANCE

AND POLITICAL ECONOMY

AMRITA DILLON

Kings College London

This special issue of the journal is devoted to one of the more urgent prob-

lems of our time—corruption and its control. Corruption eats into the moral

fabric of society, weakening institutions and hurting economic growth and

the sharing of prosperity. To tackle this challenge, passion and determina-

tion are important but not enough. They have to be combined with the col-

lation of data, analysis, and careful attention to the design of law and gov-

ernance. This special issue is meant to be a small contribution to precisely

these.

Governance has become a very important concern. From MPs’ expense

scandals in the United Kingdom to major corruption scandals in developing

countries, the abuse of power by elected politicians is a key issue facing voters

in many democracies. There are various estimates of the losses in output and

growth due to corruption: for example, the World Bank Institute estimates

that the total bribes in a year are around $1 trillion (3% of the world GDP)

(Svensson 2005). This special issue on governance and political economy is

focused on corruption that takes place in politics or via political channels.

Despite the variety of policies that have been proposed, in practice not

many of these policies have been successful. Pranab Bardhan tackles this

puzzle in his overview paper. He suggests that measurement issues are at the

heart of the problem of discussions of corruption. Recent empirical litera-

ture has started developing objective measures of corruption. This develop-

ment offers the theorist a great opportunity to question the received wisdom

on the best anti-corruption policies. Bardhan discusses some popular anti-

corruption measures such as wage incentives and installing an independent

accountability agency, the severity of punishment and who should be pun-

ished (bribe giver or bribe receiver), creating competition between bureau-

crats, and increasing transparency via providing information on government

schemes to the general public. The unifying theme in his discussion is that,

theoretically, each of these measures may lead to perverse effects. Too high

a focus on anti-corruption measures could also stifle innovation in the pub-

lic sector simply because it is not always easy to distinguish mistakes from

corruption. The answers are complicated and call for models that capture

C2015 Wiley Periodicals, Inc.

Journal of Public Economic Theory, 17 (4), 2015, pp. 469–471.

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