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Bonus payments as an anti-corruption instrument: A theoretical approach

  • Cracau, Daniel
  • Franz, Benjamin

We analyse bonus payments for officials, who transfer payments truthfully to the government rather than collecting bribes. We show that optimised bonus payments are always beneficial to the government, making them a more effective anti-corruption measure than simple wage increases.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165176513001456
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 120 (2013)
Issue (Month): 1 ()
Pages: 1-4

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Handle: RePEc:eee:ecolet:v:120:y:2013:i:1:p:1-4
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Hindriks, Jean & Keen, Michael & Muthoo, Abhinay, 1999. "Corruption, extortion and evasion," Journal of Public Economics, Elsevier, vol. 74(3), pages 395-430, December.
  2. Andvig, Jens Chr. & Moene, Karl Ove, 1990. "How corruption may corrupt," Journal of Economic Behavior & Organization, Elsevier, vol. 13(1), pages 63-76, January.
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  4. Ajit Mishra, 1996. "Hierarchies, Incentives And Collusion In A Model Of Enforcement," Working papers 34, Centre for Development Economics, Delhi School of Economics.
  5. Vollaard, B.A. & van Ours, J.C., 2010. "Does Regulation of Built-In Security Reduce Crime? Evidence From a Natural Experiment," Discussion Paper 2010-45, Tilburg University, Center for Economic Research.
  6. Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. 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.
  8. Emilson C. D. Silva & Charles M. Kahn & Xie Zhu, 2007. "Crime and Punishment and Corruption: Who Needs "Untouchables?"," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(1), pages 69-87, 02.
  9. Bengt Holmstrom, 1997. "Moral Hazard and Observability," Levine's Working Paper Archive 1205, David K. Levine.
  10. Guriev, Sergei, 2004. "Red tape and corruption," Journal of Development Economics, Elsevier, vol. 73(2), pages 489-504, April.
  11. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November.
  12. Abhijit V. Banerjee, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1289-1332.
  13. Jens Chr. Andvig & Odd-Helge Fjeldstad, 2008. "Crime, Poverty and Police Corruption in Developing Countries," CMI Working Papers 7, CMI (Chr. Michelsen Institute), Bergen, Norway.
  14. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  15. repec:adr:anecst:y:2000:i:59:p:02 is not listed on IDEAS
  16. Kahn, Charles M & Silva, Emilson C D & Ziliak, James P, 2001. "Performance-Based Wages in Tax Collection: The Brazilian Tax Collection Reform and Its Effects," Economic Journal, Royal Economic Society, vol. 111(468), pages 188-205, January.
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