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Does a Salary Hike Reduce Corruption?

Author

Listed:
  • Vivekananda Mukherjee

    (Department of Economics, Jadavpur University)

  • Siddhartha Mitra

    (Department of Economics, Jadavpur University)

Abstract

Since the empirical evidence about the relation between higher salary and corruption in a bureaucracy is ambiguous, the paper theoretically explores the relation between the two. It constructs a model where at the initial equilibrium both the honest and corrupt bureaucrats coexist and shows that the effect of a salary hike crucially depends on the preference pattern of the bureaucrats. The results underline the importance of including the fixed effects in any empirical analysis studying the relation between the two variables.

Suggested Citation

  • Vivekananda Mukherjee & Siddhartha Mitra, 2013. "Does a Salary Hike Reduce Corruption?," Economics Bulletin, AccessEcon, vol. 33(4), pages 2540-2544.
    • Handle: RePEc:ebl:ecbull:eb-13-00455
    as

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    References listed on IDEAS

    as
    1. Baksi, Soham & Bose, Pinaki & Pandey, Manish, 2009. "The impact of liberalization on bureaucratic corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 214-224, October.
    2. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    3. Easterly, William, 1999. "Life during Growth," Journal of Economic Growth, Springer, vol. 4(3), pages 239-276, September.
    4. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corruption; Preference Pattern; Income;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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