Can a Corrupt Ruling Party Win a Reelection through Vote Buying?

In many developing countries, it is common for electoral candidates to use embezzled money to buy votes. We develop a dynamic model to analyze the tradeo¤ between economic performance and free handouts resulting from corruption on an incumbent party’s chances of being reelected. The results show, because voters’anticipate handouts from the politicians, politicians engage in corrupt behavior early in the election cycle while minimizing unemployment and maximizing vote buying at the end of the election cycle.