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On the Dynamics and Effects of Corruption on Environmental Protection

Author

Listed:
  • Elvio Accinelli

    (Facultad de Economía, Universidad Autónoma de San Luis Potosí. México.)

  • Laura Policardo

    (Department of Economics, University of Siena, Italy.)

  • Edgar J. Sánchez Carrera

    (Facultad de Economía, Universidad Autónoma de San Luis Potosí. México; Department of Economics, University of Siena, Italy.)

Abstract

This paper studies the joint dynamics of corruption and pollution in a model of evolutionary game theory, where firms face a given pollution standard and the government must check the compliance to this standard by means of public officials who can be honest or not. A novelty of our paper is that officials decide to be honest or not by imitation, while firms are assumed to be inter-temporal profit maximizers. One of the main findings of the paper is that one possible “ bad” outcome characterised by a whole society of polluting firms and corrupt officers can be sustained by rational agents who learn by imitation, despite the existence of multiplicity of equilibria of a perfectly honest population and a more realistic simultaneous presence of honest and dishonest agents. Furthermore, we show that the firm’s discount rate is an important decision factor that influences the environmental pollution.

Suggested Citation

  • Elvio Accinelli & Laura Policardo & Edgar J. Sánchez Carrera, 2012. "On the Dynamics and Effects of Corruption on Environmental Protection," Documentos de Trabajo (working papers) 1312, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:1312
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    File URL: https://hdl.handle.net/20.500.12008/2237
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    References listed on IDEAS

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    Cited by:

    1. Di Bartolomeo, Giovanni & Saltari, Enrico & Semmler, Willi, 2019. "The effects of political short-termism on transitions induced by pollution regulations," EconStor Preprints 200143, ZBW - Leibniz Information Centre for Economics.
    2. Accinelli, Elvio, 2015. "Instituciones, economía clásica y economía evolutiva," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(21), pages 7-26, julio-dic.

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    More about this item

    Keywords

    Bribes and corruption; Environmental quality restrictions; Games and Economics; Imitation and evolutionary dynamics.;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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