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Ex-ante and Ex-post Corruption

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  • Alberto Motta

    (University di Padova)

Abstract

This paper studies the optimal compensation policy for a corruptible inspector, in charged with monitoring evasion from a taxpayer. Namely, I discuss how the optimal compensation policy varies according to the timing of collusion, which is allowed to occur either before or after inspection takes place. This paper shows that increasing the bonus rate is a better policy than increasing the penalty rate when corruption occurs after inspection. The contrary is true when the collusive agreement is established before the inspection. Implications for privatization of law enforcement are analyzed.

Suggested Citation

  • Alberto Motta, 2009. "Ex-ante and Ex-post Corruption," "Marco Fanno" Working Papers 0094, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0094
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    File URL: https://economia.unipd.it/sites/economia.unipd.it/files/20090094.pdf
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    Cited by:

    1. Samuel, Andrew, 2009. "Preemptive collusion among corruptible law enforcers," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 441-450, August.
    2. Andrew Samuel & Aaron Lowen, 2010. "Bribery and inspection technology," Economics of Governance, Springer, vol. 11(4), pages 333-350, November.
    3. Ajit Mishra & Andrew Samuel, 2013. "Preemptive Bribery with Incomplete Information," Department of Economics Working Papers 13/13, University of Bath, Department of Economics.
    4. Farmer Amy & Méndez Fabio & Samuel Andrew, 2018. "A Note on Licenses in the Presence of Corruption," Review of Law & Economics, De Gruyter, vol. 14(3), pages 1-14, November.

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