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Intermediaries and corruption

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  • Hasker, Kevin
  • Okten, Cagla

Abstract

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.

Suggested Citation

  • Hasker, Kevin & Okten, Cagla, 2008. "Intermediaries and corruption," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 103-115, July.
    • Handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:103-115
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Charles Angelucci & Antonio Russo, 2015. "Petty corruption and citizen feedback," Working Papers 2015/25, Institut d'Economia de Barcelona (IEB).
    2. Michael A Sartor & Paul W Beamish, 2018. "Host market government corruption and the equity-based foreign entry strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 346-370, April.
    3. Ariane Lambert-Mogiliansky & Mukul Majumdar & Roy Radner, 2009. "Strategic analysis of petty corruption with an intermediary," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 45-57, April.
    4. Johann Graf Lambsdorff, 2013. "Corrupt intermediaries in international business transactions: between make, buy and reform," European Journal of Law and Economics, Springer, vol. 35(3), pages 349-366, June.
    5. Mikhail Drugov & John Hamman & Danila Serra, 2014. "Intermediaries in corruption: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 17(1), pages 78-99, March.
    6. Graf Lambsdorff, Johann, 2010. "Deterrence and constrained enforcement: Alternative regimes to deal with bribery," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-60-10, University of Passau, Faculty of Business and Economics.
    7. Cooter Robert D. & Garoupa Nuno, 2014. "A Disruption Mechanism for Bribes," Review of Law & Economics, De Gruyter, vol. 10(3), pages 241-263, November.
    8. Fredriksson, Anders, 2014. "Bureaucracy intermediaries, corruption and red tape," Journal of Development Economics, Elsevier, vol. 108(C), pages 256-273.
    9. Bayar, Güzin, 2014. "Spurious middlemen in corrupt transactions," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-32.
    10. Andrews, Matt & Harrington, Peter, 2016. "Off Pitch: Football's Financial Integrity Weaknesses, and How to Strengthen Them," Working Paper Series 16-009, Harvard University, John F. Kennedy School of Government.
    11. Elton Dusha, 2015. "Intermediated Corruption," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(3), pages 997-1017, August.
    12. Bayar, Güzin, 2014. "Spurious middlemen in corrupt transactions," Economics Discussion Papers 2014-26, Kiel Institute for the World Economy (IfW Kiel).
    13. Ajit Mishra & Andrew Samuel, 2013. "Corruption and Hold-Up: The Role of Intermediaries," Department of Economics Working Papers 12/13, University of Bath, Department of Economics.
    14. Charles Angelucci & Antonio Russo, 2015. "Petty Corruption and Citizen Reports," CESifo Working Paper Series 5528, CESifo.

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