“Plata o Plomo?”:Bribe and Punishment in a Theory of Political Influence

Abstract

W e present a model where groups attempt to influence policies using both bribes (plata, Spanish for silver) and the threat of punishment (plomo, Spanish for lead). We then use it to make predictions about the quality of a country's public officials and to understand the role of institutions granting politicians with immunity from legal prosecution. The use of punishment lowers the returns from public office and reduces the incentives of high-ability citizens to enter public life. Cheaper plomo and more resources subject to official discretion are associated with more frequent corruption and less able politicians. This predicts that violence in a country will typically go together with corruption and worse politicians. Moreover, the possibility of punishment changes the nature of the influence game, so that even cheaper plata can lower the ability of public officials. Protecting officials from accusations of corruption (immunity) will decrease the frequency of corruption if the judiciary is weak and may increase the quality of politicians. These predictions cannot emerge from a traditional model where only bribes are used.The positive evils and dangers of the representative, as of every other form of government, may be reduced to two heads: first, general ignorance and incapacity, or, to speak more moderately, insufficient mental qualifications, in the controlling body; secondly, the danger of its being under the influence of interests not identical with the general welfare of the community.--John Stuart Mill participants in various seminars and conferences for helpful comments.

The Causes and Consequences of Organised Crime: Preliminary Evidence Across Countries

“…Dal B o et al (2006) show how credible threats from criminal organisations with a strong military power could lead to the adverse selection of politicians, as only those with worse external opportunities would run for appointment in mafia-ridden areas. Dal B o et al (2006) show how credible threats from criminal organisations with a strong military power could lead to the adverse selection of politicians, as only those with worse external opportunities would run for appointment in mafia-ridden areas.…”

“…From a theoretical perspective, Dal B o and Di Tella (2003) and Dal B o et al (2006Dal B o et al ( , 2007 have shown that criminal groups with sufficient economic and military power may affect policies by either bribing or intimidating politicians in office (Kugler et al, 2005). From a theoretical perspective, Dal B o and Di Tella (2003) and Dal B o et al (2006Dal B o et al ( , 2007 have shown that criminal groups with sufficient economic and military power may affect policies by either bribing or intimidating politicians in office (Kugler et al, 2005).…”

“…For instance, Buchanan (1973) argued that the monopoly power exerted by criminal organisations in some illegal markets may indeed be desirable because, as in any other market, it would restrict the equilibrium supply of (illicit) goods; Backhaus (1979) reaches an opposite conclusion based on the existence of economies of scale in the production of such goods. Finally, several papers have examined the implications of organised crime for the quality and accountability of the political class; see, among others, Kugler et al (2005), Dal B o and Di Tella (2003) and Dal B o et al (2006Dal B o et al ( , 2007. Finally, several papers have examined the implications of organised crime for the quality and accountability of the political class; see, among others, Kugler et al (2005), Dal B o and Di Tella (2003) and Dal B o et al (2006Dal B o et al ( , 2007.…”

Does illegality breed violence? Drug trafficking and state-sponsored protection rackets

“…Coupled with competition over market share, this rivalry may spark violence between organizations. 6 Still, if the state has the capacity to cut durable deals with the organizations, it can mitigate struggles over market share and thus potentially maintain peace. Conversely, in the "many protectors, one organization" scenario preferred by criminal organizations, violence may occur between protectors as they compete to control the income generated by a single organization.…”

“…Dal Bó et al[6] use a similar logic to explain how pressure groups extract policies more easily from government officials when they can use both transfers, such as bribes, and threats at the same time in order to get policy favors.…”