Are Politicians Really That Corrupt?

May 17, 2012 in Daily Bulletin, Signature

Ray Fisman* reports that data from India suggests that politicians aren’t as corrupt as they are commonly believed to be. Highlights from his study include:

  • On average the wealth of an elected politician grows by 6% relative to the runner-up that they beat.
  • This can add up: after five years this means an additional $60,000 in wealth.
  • This is more than the few thousand dollars that politicians can expect to earn through their salary. But in absolute terms the figure is much lower than one would expect.
  • Those who are appointed to cabinet level posts truly benefit. Their wealth increases by 15% compared to those who lost against them.
  • However to be appointed to a cabinet level position requires you to be intelligent and skilled – the very qualities that are likely to lead to a higher income in the first place.
  • Politicians who come from the private sector and are re-elected actually see their income grow by less than their opponent.

To read more about why this paints a fairly benign picture of Indian corruption, some potential deficiencies in the study, why this study was possible, the methodology behind it, and what happens to the wealth of incumbents, click here.

Source: Slate

Via: Freakonomics

*Centives incorrectly spelled Mr. Fisman’s name as “Ray Fishman”. Apologies for the error and thanks to T. Fitch for pointing this out.