Legislators in modern democracies (a) accept bribes that are small compared to the value of the statutes they pass and (b) allow bans against bribery to be enforced. In our model of bribery, rational legislators accept bribes smaller not only than the benefit the briber receives but than the costs the legislators incur in accepting the bribes. Rather than risk this outcome, the legislators may be willing to suppress bribery altogether. The size of legislatures, the quality of voter information, the nature of party organization, and the structure of committees will all influence the frequency and size of bribes.
We gratefully acknowledge the support of the Olin Foundation and the Center for the Study of the Economy and the State at the University of Chicago, the comments of Jeff Lange, Daniel Lowenstein, George Michaelides, Frances Rosenbluth, participants in the Econometric Society 1990 Winter Meetings and the UCLA Political Economy Lunch Group, and especially the generous encouragement and comments of John Wiley. Much of this work was done while the authors were at the University of Chicago Graduate School of Business, Harvard Law School, the University of Tokyo School of Law, UCLA's Anderson Graduate School of Management, the UCLA School of Law, and Yale Law School.