A research done by a correspondent of the knowledge.insead.edu website found some interesting insights on how politics brings money to politicians. It was able to track the income of individual politicians and tie it to the level of influence.
According to Transparency International, Denmark has been for 3 years the world’s least corrupt country. Denmark has an effective combination of Scandinavian social-welfare programs and business-friendly bureaucracy. And contrary to what you may expect, even in this country, where outright bribery is extremely rare, power still pays dividends. Families and firms linked to local-level politicians still benefit from that relationship.
Administrative reform
The study Return to Political Power in a Low-Corruption Environment was able to tie income of individual politicians to how much influential they have. In 2005, there was an administrative reform that took place in Denmark. Politicians who were reelected in merged municipalities enjoyed increased power, measured in terms of budget and the size of their constituency. Some municipalities didn’t merge so politicians governing these constituencies were the ideal control group.
Monetary gains from political office
Data from the tax authority showed that the average total personal income (excluding pay rise) of a re-elected politician in a merged municipality increased by almost 4 %. The increases were more noticeable when higher status kicked in. It was 17 % for mayors and around 8 % for party leaders.
The data information was not exact about where the extra money came from. One factor appears to be appointments to corporate boards. Merged-municipality politicians held many more corporate directorships than the control group, which could not be explained by individual characteristics. The power-income connection was twice as strong on average for the offspring of the politicians. There may not be illegal, but it is worth noticing.
-jk-