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

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Listed:
  • Cracau, Daniel
  • Franz, Benjamin

Abstract

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.

Suggested Citation

  • Cracau, Daniel & Franz, Benjamin, 2013. "Bonus payments as an anti-corruption instrument: A theoretical approach," Economics Letters, Elsevier, vol. 120(1), pages 1-4.
  • Handle: RePEc:eee:ecolet:v:120:y:2013:i:1:p:1-4
    DOI: 10.1016/j.econlet.2013.03.036
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    References listed on IDEAS

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    More about this item

    Keywords

    Corruption; Principal–agent game; Monetary incentives;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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