What is bad about grand, political corruption? Similar to the problem of a corrupt bureaucrat, a government's head fails to credibly commit to honesty if being guided by corrupt goals. He thus disqualifies for attracting investors. The advantage from bribery turns against its actor because investors are stripped of guarantees that their property will be honored. Even those politicians who are primarily career-oriented may try to avoid this downside effect and prefer to commit to anticorruption instead.

Corruption has been defined as the misuse of public power for private benefit. But the term “misuse” is open to different interpretations. In Chapter 2, it involved the rules set up by a benevolent principal, which were trespassed by a self-serving agent. While this approach was appropriate for bureaucratic corruption, it appears misguided for political corruption. A self-serving principal, a government that disregards its duty of serving the public, might create an environment where laws do not prohibit its own self-enrichment or that of a ruling class. Corruption can even accompany and underlie the writing and enforcing of rules designed with the intention of furthering the principal's narrow interests.

In case the principal is not benevolent, a definition of corruption as a violation of rules would be misleading. This can be illustrated with a case study from Thailand. It is reported that strict rules prohibit ordinary citizens from taking away anything from the tropical forest in Thailand, even leaves and pebbles.