DP4361 How to Subvert Democracy: Montesinos in Peru

Author(s): John McMillan, Paolo Zoido
Publication Date: April 2004
Keyword(s): bribery, checks and balances, corruption, democracy, institutions, media, peru
JEL(s): L82, P16
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4361

Which of the democratic checks and balances ? opposition parties, the judiciary, a free press ? is the most critical? Peru has the full set of democratic institutions. In the 1990s, the secret-police chief Montesinos systematically undermined them all with bribes. We quantify the checks using the bribe prices. Montesinos paid television-channel owners about 100 times what he paid judges and politicians. One single television channel?s bribe was four times larger than the total of the opposition politicians? bribes. By revealed preference, the strongest check on the government?s power was the news media.