Decentralization, political competition and corruption Articles uri icon

publication date

  • November 2013

start page

  • 103

end page

  • 111


  • 105

International Standard Serial Number (ISSN)

  • 0304-3878

Electronic International Standard Serial Number (EISSN)

  • 1872-6089


  • We study the effect of decentralization on corruption in a political agency model from the perspective of a region. In a model where corruption opportunities are lower under centralization at each period of time, decentralization makes it easier for citizens to detect corrupt incumbents. As a consequence, the relationship between fiscal decentralization and corruption is conditional on political competition: decentralization is associated with lower (higher) levels of corruption for sufficiently high (low) levels of political competition. We test this prediction and find that it is empirically supported. Also, we show how the preferences of voters and politicians about fiscal decentralization can diverge in situations where political competition is weak. (C) 2013 Elsevier B.V. All rights reserved.


  • decentralization; centralization; political agency; corruption; quality of politicians