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On Basu s Proposal: Fines Affect Bribes

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Abstract

I model the connection between the equilibrium bribe amount and the fines imposed on both bribe-taker and bribe-payer. I show that Basu s (2011) proposal to lower the fines imposed on bribe-payers in order to induce more whistleblowing and increase the probability of penalizing corrupt government officials might instead increase bribe amounts. Higher expected fines on bribe-takers will make them charge larger bribes; at the same time, lowering fines for bribe-paying might increase bribe-payers willingness to pay bribes.

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  • Popov, Sergey V, 2017. "On Basu s Proposal: Fines Affect Bribes," Cardiff Economics Working Papers E2017/11, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2017/11
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    Cited by:

    1. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.

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    More about this item

    Keywords

    corruption; bribery; extortion; decentralization; fines;
    All these keywords.

    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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