This article studies the relation between the structure of monitoring hierarchies and corruption, that is, the expected number of bribed members. The model allows for internal corruption, a form of collusion eliminating accountability (monitoring) in the hierarchy. It is shown that the number of subordinates in a corruption-minimizing hierarchy is constrained by the prospect of internal corruption and/or monitoring costs. This constraint may generate structurally independent segments. When its members are provided with the same incentive system, the middle rank of a supervision chain displays the lowest external corruption, but there is more scope for internal corruption in the upper part than in the lower part. Copyright 1996 by Oxford University Press.
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Volume (Year): 12 (1996) Issue (Month): 2 (October) Pages: 277-98 Download reference. The following formats are available: HTML
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Handle: RePEc:oup:jleorg:v:12:y:1996:i:2:p:277-98
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