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The role of externalities in determining the average level of corruption in the production process

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Author Info
Savvateev Alexey ()

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Abstract

A model of corruption in the production process is built which is aimed at studying the problem of choosing the optimal scheme of punishment, taking into account the structure of given production relations, as well as the fixed budget assumption. Stable equilibria of the model are characterized, and the mechanism of a bureaucrat's decision-making process is described. The crucial role of strategic interactions among bureaucrats is emphasized. Then, the model is used to examine punishment schemes: to what degree should punishment schemes depend on the deviation from the verage level of corruption by a given agent. Normally, it is better for a policymaker to have a scheme which reacts sharply to the deviations.

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Publisher Info
Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number 2k-04e.

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Length: 63 pages
Date of creation: 22 Oct 2001
Date of revision:
Handle: RePEc:eer:wpalle:2k-04e

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Related research
Keywords: Russia; externalities; corruption; production process;

Other versions of this item:

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D62 - Microeconomics - - Welfare Economics - - - Externalities
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September. [Downloadable!] (restricted)
  2. Sanchez, Isabel & Sobel, Joel, 1993. "Hierarchical design and enforcement of income tax policies," Journal of Public Economics, Elsevier, vol. 50(3), pages 345-369, March. [Downloadable!] (restricted)
    Other versions:
  3. Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November. [Downloadable!] (restricted)
  4. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
    Other versions:
  5. Acemoglu, D. & Verdier, T., 1997. "The Choice between Market Failures and Corruption," DELTA Working Papers 97-06, DELTA (Ecole normale supérieure).
    Other versions:
  6. Susanto Basu & David D. Li, 1998. "Corruption in Transition," William Davidson Institute Working Papers Series 161, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  7. Leonid Polishchuk & Alexei Savvateev, 2004. "Spontaneous (non)emergence of property rights," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(1), pages 103-127, 03. [Downloadable!] (restricted)
  8. Panova Elena & Vasin Alexander, 2000. "Tax Collection and Corruption in Fiscal Bodies," EERC Working Paper Series 99-10e, EERC Research Network, Russia and CIS. [Downloadable!]
  9. Tirole, Jean, 1996. "A Theory of Collective Reputations (with Applications to the Persistence of Corruption and to Firm Quality)," Review of Economic Studies, Blackwell Publishing, vol. 63(1), pages 1-22, January. [Downloadable!] (restricted)
    Other versions:
  10. Chander, Parkash & Wilde, Louis, 1992. "Corruption in tax administration," Journal of Public Economics, Elsevier, vol. 49(3), pages 333-349, December. [Downloadable!] (restricted)
  11. Sah, Raaj K, 1991. "Social Osmosis and Patterns of Crime," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1272-95, December. [Downloadable!] (restricted)
  12. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February. [Downloadable!] (restricted)
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