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How to Subvert Democracy: Montesinos in Peru

by John McMillan and Pablo Zoido. Reading for week of July 20, 2004.

Which of the democratic checks and balances--opposition parties, the judiciary, a free press--is the most forceful?  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 a television-channel owner about 100 times what he paid a judge or a politician.  One single television channel's bribe was five 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.

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