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Lobbying, Bribery, and Compliance: An Evolutionary Model of Social Factors

Author

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  • Abbas Khandan

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

Abstract

Connecting to rule-makers in order to set favorable rules (lobbying) or paying government executives to bend the current rule (bribing) are the two main strategies for influencing government. This study in an evolutionary game model explain why bribing may become widespread while other states like compliance and cooperative lobbying are Pareto superior. The theoretical model is used to study the effect of social parameters on firm’s choice between lobbying and bribing. The results indicate that social disapproval of bribery has a negative impact on corruption. The effect, however, depends on the history of countries. Countries with a long history of corruption have much more difficult task in fight with corruption. Cooperation was the second social factor to be investigated. The effect of cooperation on lobbying is indirect through alleviating the difficulty and costs of linking to the government. Whenever and wherever linking is difficult, firms by cooperation, can make it less impeding.

Suggested Citation

  • Abbas Khandan, 2018. "Lobbying, Bribery, and Compliance: An Evolutionary Model of Social Factors," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(4), pages 956-989, Autumn.
    • Handle: RePEc:eut:journl:v:22:y:2018:i:4:p:956
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