IDEAS home Printed from https://ideas.repec.org/a/eme/igdrpp/v2y2009i1p39-55.html
   My bibliography  Save this article

Intermediation in corruption markets

Author

Listed:
  • Gautam Bose
  • Shubhashis Gangopadhyay

Abstract

Purpose - Consider a government benefit that is earmarked for a group of people “deserving” the benefit. Corruption happens when undeserving candidates obtain the benefit with the help of corrupt officials. Often, such corrupt activities are mediated by professional touts who act as intermediaries between the undeserving candidates and the corrupt officials. The purpose of this paper is to analyze the equilibrium in such an intermediated market. Design/methodology/approach - A queuing model was theoretically analyzed where candidates wait in line to obtain the benefit. Undeserving candidates can also obtain the service – in exchange for a bribe – if they happen to wait at a counter with a corrupt clerk. The intermediary collects information to find out which clerks are corrupt, and charges a fee to direct candidates to an honest or corrupt clerk, as the candidate may choose. Findings - In a market with a single intermediary we show that, under fairly general conditions: the intermediary is active; both deserving and undeserving candidates use the service of the intermediary; welfare in an economy with an intermediary is lower than that in an economy without intermediaries; and under some conditions, an optimal response to corruption is to reduce the number of officials dispensing the benefit. Originality/value - This paper provides a framework within which intermediated markets for corruption can be analysed. The framework is easy to adapt and can accommodate social costs other than waiting costs. The conclusion suggests more complex scenarios that may be analysed using the approach in this model.

Suggested Citation

  • Gautam Bose & Shubhashis Gangopadhyay, 2009. "Intermediation in corruption markets," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 2(1), pages 39-55, April.
    • Handle: RePEc:eme:igdrpp:v:2:y:2009:i:1:p:39-55
    DOI: 10.1108/17538250910953453
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538250910953453/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/17538250910953453/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/17538250910953453?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bardhan, Pranab, 2022. "Clientelism and governance," World Development, Elsevier, vol. 152(C).
    2. Sujata Ghosh & Biswajit Mandal, 2019. "Bureaucratic efficiency, economic reform and informal sector," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 121-137, June.
    3. Fredriksson, Anders, 2014. "Bureaucracy intermediaries, corruption and red tape," Journal of Development Economics, Elsevier, vol. 108(C), pages 256-273.
    4. Malay Biswas, 2017. "Are They Efficient in the Middle? Using Propensity Score Estimation for Modeling Middlemen in Indian Corporate Corruption," Journal of Business Ethics, Springer, vol. 141(3), pages 563-586, March.
    5. Charles Angelucci & Antonio Russo, 2015. "Petty corruption and citizen feedback," Working Papers 2015/25, Institut d'Economia de Barcelona (IEB).
    6. Gil S. Epstein & Ira N. Gang, 2010. "Why Pay Taxes When No One Else Does?," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 374-385, May.
    7. Amrita Dillon & PRANAB BARDHAN, 2015. "Corruption and Development Policy (Drawing Upon the Recent Indian Debate)," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(4), pages 472-479, August.
    8. Ajit Mishra & Andrew Samuel, 2013. "Corruption and Hold-Up: The Role of Intermediaries," Department of Economics Working Papers 12/13, University of Bath, Department of Economics.
    9. Charles Angelucci & Antonio Russo, 2015. "Petty Corruption and Citizen Reports," CESifo Working Paper Series 5528, CESifo.
    10. Mikhail Drugov & John Hamman & Danila Serra, 2014. "Intermediaries in corruption: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 17(1), pages 78-99, March.
    11. Chaudhuri, Sarbajit & Mandal, Biswajit, 2012. "Bureaucratic reform, informal sector and welfare," MPRA Paper 36072, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:igdrpp:v:2:y:2009:i:1:p:39-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.