The Trouble with Dynasties

By Pamela W. Laird

Why doesn’t George W. Bush fire Attorney General Alberto Gonzales? Like Donald Rumsfeld before him and, more recently, Paul Wolfowitz, Gonzales is causing President Bush political embarrassment and costing him political support. The President’s supporters praise his personal loyalty to subordinates. His critics charge him with arrogance and unwillingness to admit error. But both sides, while recognizing Bush’s loss of political capital, fail to recognize his protection of something he regards as more critical: his social capital.

Full article

Corruption as Betrayal : Experimental Evidence on Corruption Under Delegation

By Nicolas Jacquemet
Working Paper 0506
GATE (Lyon II University) & CIRPEE (Laval University)

ABSTRACT
We consider corruption behavior in a three-players game : Principal, Agent, Corrupter. When the Principal chooses a fair wage, the Agent faces con°icting interests to reciprocate. This delegation effect is expected to lower the level of corruption as compared to what arises in two-players settings. We set up two experiments varying in the exogeneity of the delegation relationship. The experimental evidence supports the delegation effect. This, in turn, could account for the deterrence effect of wage on corruption even in the absence of detection.

Paper pdf version