Wages and Sanctions against Hierarchical Corruption
AbstractThe general aim of this paper is to contribute to the study of factors that decrease corruption in the public sector and especially in tax administration. A matter of particular interest will be the effects of raising civil servants’ wages and penalties on the behavior of agents in case of tax evasion. We will also look into the role of civil society and the dismissal sanction in a country of high level of unemployment in the fight against corruption. Using a model referring to a typical agency problem, we will demonstrate how the coalition among civil servants and taxpayers may be broken in order to curb tax evasion and the incidence of corruption.
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Bibliographic InfoPaper provided by Aix-Marseille Université, CERGAM in its series CAE Working Papers with number 51.
Length: 28 pages
Date of creation: 2007
Date of revision:
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Governmental corruption; tax evasion; coalition; game theory; behavioral of economic agents; wages and penalties in public sector;
Find related papers by JEL classification:
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H1 - Public Economics - - Structure and Scope of Government
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
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- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Vito Tanzi, 1994. "Corruption, Governmental Activities, and Markets," IMF Working Papers 94/99, International Monetary Fund.
- Nadeem Ul Haque & Ratna Sahay, 1996. "Do Government Wage Cuts Close Budget Deficits? Costs of Corruption," IMF Staff Papers, Palgrave Macmillan, vol. 43(4), pages 754-778, December.
- Srinivasan, T. N., 1973. "Tax evasion: A model," Journal of Public Economics, Elsevier, vol. 2(4), pages 339-346.
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