Are democracies less corrupt than other forms of government? The desire for re-election constrains the greed of politicians. The protection of civil liberties and free speech, which generally accompanies democratic elections, makes open and transparent government possible. In contrast, non-democratic states are especially susceptible to corrupt incentives because their rulers have the potential to organize government with few checks and balances.
But this contrast is too sharp. One need look no further than some state and municipal governments in the United States to find a number of well-established corrupt systems that compare quite well with autocratic states. 1 Recent payoff scandals have implicated elected politicians in many countries. 2 Clearly, democratic forms do not always succeed in checking corruption and may encourage wealthy private interests to participate in political life. Thus, it is worthwhile asking which features of democratic government help limit self-dealing and which contribute to corruption and insider influence.
In analyzing the incentives for corruption in democracies, one should recognize the weaknesses of even honest democratic systems in providing broad-based public goods (Shugart 1992). Some skeptics view all legislative enactments as interest group deals and favor governments that are full of checks and balances. This seems too cynical a view, but it does highlight the fact that governments frequently provide narrowly-focused benefits even without any illegal bribery. In fact, levels of corruption may be low in just those polities where special interest legislation is pervasive, and may be high where there is no legal route for wealthy interests to influence politics. Corruption depends both on the organization of electoral and legislative processes and on the extent to which wealthy interests seek benefits from the political system. Three factors are central in determining the incidence of political corruption. They affect politicians' willingness to accept illegal payoffs, voters' toleration of such payoffs, and the willingness to pay of wealthy groups. The first dimension is the existence of narrow benefits available for distribution by politicians. The second is the ability of wealthy groups