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Corruption in Hierarchies

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  • Juan D. CARRILLO
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    Abstract

    We study the efficiency of measures to fight bribery in a three-tier organization when corruption can propagate within the hierarchy and officials privately know their propensity for corruption. We show that if the organization relies on internal labor markets or superiors choose the effort exerted in monitoring, then increasing wages and stiffening supervision may have perverse effects in the incentives of officials to act honestly, and therefore end up increasing the overall level of bribery.

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    File URL: http://www.jstor.org/stable/20076241
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    Bibliographic Info

    Article provided by ENSAE in its journal Annals of Economics and Statistics.

    Volume (Year): (2000)
    Issue (Month): 59 ()
    Pages: 37-61

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    Handle: RePEc:adr:anecst:y:2000:i:59:p:02

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    Cited by:
    1. Shah, Anwar, 2006. "Corruption and decentralized public governance," Policy Research Working Paper Series 3824, The World Bank.
    2. Dubois, Pierre & Jullien, Bruno & Magnac, Thierry, 2007. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," IZA Discussion Papers 2842, Institute for the Study of Labor (IZA).
    3. Anton Granik & Francesco Saraceno, 2012. "Institutions and growth: A simplied theory of decentralization and corruption," Documents de Travail de l'OFCE 2012-21, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. Cracau, Daniel & Franz, Benjamin, 2013. "Bonus payments as an anti-corruption instrument: A theoretical approach," Economics Letters, Elsevier, vol. 120(1), pages 1-4.
    5. repec:spo:wpecon:info:hdl:2441/53r60a8s3kup1vc9k2cag6dp8 is not listed on IDEAS
    6. Audrey Hu & Liang Zhou, 2007. "Selecting less Corruptible Bureaucrats," Tinbergen Institute Discussion Papers 07-096/1, Tinbergen Institute.
    7. Valerie Rosenblatt, 2012. "Hierarchies, Power Inequalities, and Organizational Corruption," Journal of Business Ethics, Springer, vol. 111(2), pages 237-251, December.

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