Corruption and the time horizons of politicians

This study focuses primarily on the reasons for political corruption around the world. This paper suggests that the incentive structure for politicians under certain government institutional frameworks will decide the level of corruption. I attempt to shed some light, empirically, on an incentive for politicians engage in corrupt behavior, namely, time horizons of politicians. The research question of this paper is: do time horizons of politicians affect the levels of corruption? The hypothesis of this study is that the time horizons of politicians provide an incentive for them to redesign government institutions in certain ways. Politicians who have short-term horizons would not protect collective property rights, because they do not expect to get an increased return from citizens later. They would deliberately choose to make inefficient institutions and policies that increase present gains but give up future revenue. In contrast, long-term horizons of politicians could give them an incentive to secure collective property rights because they would predictably try to get more corrupt money from a growing economic pie. Paradoxically, protecting property rights will reduce the level of corruption over all. Then, politicians will have fewer opportunities to be involved in corrupt behavior. For empirical analysis, this study uses political stability and regime types as proxies of the time horizons of politicians. The results of this study imply that a proper design of government institutions is a prerequisite for controlling corruption. Corruption control efforts must focus on government institutions rather than people. Metaphorically speaking, picking a rotten apple from a wet box does not save the other apples. The box itself must be dried and fixed to keep the apples fresh.