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Intermediaries and corruption

  • Hasker, Kevin
  • Okten, Cagla
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    Surveys of businessmen and anecdotal evidence blame intermediary agents (middlemen hired by corporations and individuals) for increasing corruption in the developing world. Although this problem has gained the attention of policy makers, there has been little formal analysis of it in the economics literature. In a game theoretic model analyzing the interaction between clients, public official and intermediary agents, we find that intermediary agents worsen the impact of corruption and that traditional methods of fighting corruption can actually increase corruption in the presence of intermediary agents.

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    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 67 (2008)
    Issue (Month): 1 (July)
    Pages: 103-115

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    Handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:103-115
    Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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    1. Polinsky, A. Mitchell & Shavell, Steven, 2001. "Corruption and optimal law enforcement," Journal of Public Economics, Elsevier, vol. 81(1), pages 1-24, July.
    2. Güzin Bayar, 2005. "The role of intermediaries in corruption," Public Choice, Springer, vol. 122(3), pages 277-298, March.
    3. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
    4. Guriev, Sergei, 2004. "Red tape and corruption," Journal of Development Economics, Elsevier, vol. 73(2), pages 489-504, April.
    5. Bowles, Roger & Garoupa, Nuno, 1997. "Casual police corruption and the economics of crime," International Review of Law and Economics, Elsevier, vol. 17(1), pages 75-87, March.
    6. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
    7. Garoupa, Nuno & Klerman, Daniel, 2004. "Corruption and the optimal use of nonmonetary sanctions," International Review of Law and Economics, Elsevier, vol. 24(2), pages 219-225, June.
    8. Kaufmann, Daniel & Wei, Shang-Jin, 1999. "Does 'Grease Money' Speed Up the Wheels of Commerce?," MPRA Paper 8209, University Library of Munich, Germany.
    9. Edgardo Campos, J. & Lien, Donald & Pradhan, Sanjay, 1999. "The Impact of Corruption on Investment: Predictability Matters," World Development, Elsevier, vol. 27(6), pages 1059-1067, June.
    10. Lambsdorff, Johann Graf, 2002. "Making corrupt deals: contracting in the shadow of the law," Journal of Economic Behavior & Organization, Elsevier, vol. 48(3), pages 221-241, July.
    11. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    12. Odd-Helge Fjeldstad, 2002. "Fighting fiscal corruption: The case of the Tanzania Revenue Authority," CMI Working Papers WP 2002:3, CMI (Chr. Michelsen Institute), Bergen, Norway.
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