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Last corrupt deed before retirement? Evidence from a lower middle-income country

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  • Nguyen, Cuong Viet

Abstract

We provide evidence of the effect of term limits on the rent-seeking behavior of directors of state-owned enterprises (SOEs) in Vietnam by showing that these directors recruit substantially more employees just before retirement. We argue that a possible motive of these directors for the over-recruitment is to obtain bribes from employees, since the increase in employment is not associated with higher output, and the effect of these directors’ last year in office on SOE labor is smaller in provinces with better corruption control. This finding also provides an explanation why SOEs tend to have an excess of labor and suggests that privatization can reduce this excess.

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  • Nguyen, Cuong Viet, 2021. "Last corrupt deed before retirement? Evidence from a lower middle-income country," Journal of Development Economics, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:deveco:v:151:y:2021:i:c:s0304387821000523
    DOI: 10.1016/j.jdeveco.2021.102673
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    More about this item

    Keywords

    Term limits; Retirement; Corruption; State-owned enterprise; Privatization;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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