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Award Abstract # 1323034
Doctoral Dissertation Research in Political Science: Corruption and Incumbency Disadvantage in New Democracies

NSF Org: SES
Division of Social and Economic Sciences
Recipient: NEW YORK UNIVERSITY
Initial Amendment Date: January 24, 2014
Latest Amendment Date: July 2, 2014
Award Number: 1323034
Award Instrument: Standard Grant
Program Manager: Lee Walker
lwalker@nsf.gov
 (703)292-7174
SES
 Division of Social and Economic Sciences
SBE
 Directorate for Social, Behavioral and Economic Sciences
Start Date: February 1, 2014
End Date: January 31, 2016 (Estimated)
Total Intended Award Amount: $15,813.00
Total Awarded Amount to Date: $15,813.00
Funds Obligated to Date: FY 2014 = $15,813.00
History of Investigator:
  • Joshua Tucker (Principal Investigator)
    joshua.tucker@nyu.edu
  • Marko Klasnja (Co-Principal Investigator)
Recipient Sponsored Research Office: New York University
70 WASHINGTON SQ S
NEW YORK
NY  US  10012-1019
(212)998-2121
Sponsor Congressional District: 10
Primary Place of Performance: New York University
19 W 4th Street
New York
NY  US  10012-2331
Primary Place of Performance
Congressional District:
10
Unique Entity Identifier (UEI): NX9PXMKW5KW8
Parent UEI:
NSF Program(s): Political Science
Primary Program Source: 01001415DB NSF RESEARCH & RELATED ACTIVIT
Program Reference Code(s): 9179, SMET
Program Element Code(s): 137100
Award Agency Code: 4900
Fund Agency Code: 4900
Assistance Listing Number(s): 47.075

ABSTRACT

This award satisfies Division B, Title V, Sec. 543 of the Consolidated and Further Continuing Appropriations Act of 2013 (P.L. 113-6, enacted on March 26, 2013).

The project addresses corruption in emerging democracies, an issue critical to political stability in the world. Developing an understanding of political corruption is therefore vital for US national security interests. The project addresses an important puzzle: why does it seem that incumbent politicians are disadvantaged (less likely to win re-election than to be defeated by challengers) in many new democracies, and what role does corruption play in this process?

Intellectual Merit: The project develops and tests a theory that proposes that incumbent corruption -- misuse of office for private gain -- is an important source of this disadvantage. Corruption is known to be higher in younger and poorer democracies than in established richer democracies. When voters cannot know exactly who is corrupt, there are many conditions under which voters will generally favor a challenger over any incumbent. This includes if the majority of politicians are corrupt, if potentially corrupt incumbents are rare but particularly rapacious, or if corrupt politicians can learn quickly how to better extract resources (i.e., become "more efficient at being corrupt"). Empirically verifying this hypothesis is challenging because corruption is difficult to observe and measure precisely, and because many factors related to corruption -- such as poverty or inequality -- may instead account for the incumbency disadvantage.

To address these challenges, the project relies on extensive data to infer incumbent corruption in a study of Romanian mayoral elections, including: (1) more than 4,000 publicly available declarations of assets to detect abnormal wealth accumulation among incumbents; (2) over 1 million contracts by local public companies to identify suspiciously high prices, uncompetitive bids, or politically-connected awardees; (3) a comparison of budgeted expenditures on infrastructure with data on changes in its actual physical stock to identify leakages in public funds spending; and (4) data from more than 10,000 firms to uncover corrupt privatization of state property inherited from communism.

Further, the project takes advantage of a unique institution in Romania: by law, the salary of the mayor increases once a city's population exceeds a certain threshold. Prior research has suggested that better pay decreases the need for illegitimate income and attracts more upstanding candidates for office, resulting in lower corruption. This rule permits a comparison of the incumbency (dis)advantage in cities with populations just above and below these salary thresholds. Cities near these thresholds should be similar in many other important respects except for the mayor's salary (and so, by extension, corruption). This strategy holds constant other potential causes of incumbency disadvantage and isolates the effect of corruption.

Broader Impacts: Studying incumbency disadvantage in a young democracy such as Romania is important for several reasons. While incumbency disadvantage may be a desirable response to corruption, it also likely induces high policy instability and discourages high quality candidates from running for political office. Both high policy instability and low quality of political elites can threaten economic and social stability, and ultimately endanger the prospects for enduring democracy and economic growth. Unstable societies pose threats to international security and trade, including the interests of the United States. Learning how to better anticipate such sources of instability can better inform both foreign policy decisions and anti-corruption programs.

PUBLICATIONS PRODUCED AS A RESULT OF THIS RESEARCH

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Marko Kla?nja "Corruption and the Incumbency Disadvantage: Theory and Evidence" Journal of Politics , v.77 , 2015 , p.928

PROJECT OUTCOMES REPORT

Disclaimer

This Project Outcomes Report for the General Public is displayed verbatim as submitted by the Principal Investigator (PI) for this award. Any opinions, findings, and conclusions or recommendations expressed in this Report are those of the PI and do not necessarily reflect the views of the National Science Foundation; NSF has not approved or endorsed its content.

Recent studies have found that holding office is a disadvantage to incumbents seeking reelection in many developing democracies around the world, such as Brazil, India, and most post-communist Eastern European countries. This evidence stands in marked contrast to long-standing evidence of incumbency advantage in mature democracies, most notably the United States. Explanations for incumbency advantage abound. 

It is therefore puzzling why incumbency disadvantage observed in developing democracies should occur at all. Why are incumbents in these countries unable to increase their reelection probability by using their time in office to persuade voters of their quality? 

Klašnja argued theoretically that incumbency can be a disadvantage in several circumstances. Developing democracies exhibit considerably more corruption – defined as the misuse of public office for private or political gain – than mature democracies. Klašnja shows that incumbents can become more disadvantaged as the cost of committing corruption decreases. For example, lower sanctions or lower probability of detection of corruption can impel voters to compensate by being stricter at the polls. Second, when politics is generally corrupt, clean politicians are discouraged from running, decreasing the average quality of candidates on offer, including the quality of the incumbents, which in turn reduces any advantages conferred by incumbency. Finally, when gains to corruption increase with time spent in office, for example because stealing becomes easier though “learning on the job,” voters may prefer inexperienced challengers to entrenched incumbents.

Klašnja tested these hypotheses using innovative measures of local corruption in Romania, based on extensive data on wealth accumulation among Romanian mayors and their challengers, detailed data on waste in infrastructure spending, information from a large number of public procurement contracts, as well as rich data on corruption prosecutions by Romanian law enforcement. In order to isolate the causal effect of corruption on incumbency disadvantage, Klašnja  relied on (1) national rules tying mayoral salaries to population thresholds that cause jumps in the opportunity cost of corruption and thus its incidence, and (2) close elections that assign incumbency as if randomly. This strategy provides strong evidence that the large incumbency disadvantage found in Romanian local elections is caused by the incidence of corruption and the large seniority premium to corruption exploited by Romanian mayors.

However, high corruption environments are often accompanied by incumbents' attempts at electoral manipulation, through practices like vote-buying, electoral violence, and outright fraud. Such practices should limit the scope of the incumbency disadvantage, implying that it is more difficult to observe and explain it. The third part of the project tries analyzes the extent of electoral manipulation in Romania, and thus the extent to which the incumbency disadvantage is muted by the same forces related to corruption. Using a combination of constituency-level electoral data and individual-level data from a number of public opinion surveys, this part of the project identifies and explains electoral fraud in the Romanian presidential recall referendum of July 2012. Clear patterns of fraud are identified using a variety of standard and novel election fraud diagnostics, including tests of unusual turnout spikes at "round" turnout figures and suspicious discrepancies between individual and aggregate patterns of electoral preference changes in a brief amount of time between the 2012 local elections and the referendum. Additionally, the suspected fraud has clear partisan patterns, being concentrated in localities run by mayors from the governing co...

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