Choosing agents and monitoring consumption: a note on wealth as a corruption-controlling device
AbstractThere are a large number of cases where corruption has been discovered when investigating levels of consumption that appear to be hard to justify. The informativeness of an agent's level of consumption depends on his legal income and initial level of wealth, as conspicuous consumption by wealthy agents leads to little updating of the principal's belief about their honesty. This introduces a tendency to prefer poor agents as they are easier to monitor. More generally, we describe the basic problem of choosing agents and monitoring consumption with the aim of reducing corruption, and discuss features of the practical applications. Copyright � The Author(s). Journal compilation � Royal Economic Society 2008.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 118 (2008)
Issue (Month): 532 (October)
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Other versions of this item:
- Rafael Di Tella & Federico Weinschelbaum, 2007. "Choosing Agents and Monitoring Consumption: A Note on Wealth as a Corruption-Controlling Device," NBER Working Papers 13163, National Bureau of Economic Research, Inc.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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- Djankov, Simeon & La Porta, Rafael & López-de-Silanes, Florencio & Shleifer, Andrei, 2009.
"Disclosure by Politicians,"
CEPR Discussion Papers
7168, C.E.P.R. Discussion Papers.
- Abhijit Banerjee & Sendhil Mullainathan & Rema Hanna, 2012.
NBER Working Papers
17968, National Bureau of Economic Research, Inc.
- Simona Fabrizi & Steffen Lippert, 2012. "Corruption and the Public Display of Wealth," Working Papers 1202, University of Otago, Department of Economics, revised Jun 2012.
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