Uncoordinated Corruption as an Equilibrium Phenomenon
Independent rent extraction by competing public officials produces a level of bribery that is too high both from the viewpoint of corrupt administrations and from the viewpoint of social welfare. Nevertheless, governments in many developing countries do not curb the harmful lack of coordination between complementary agencies. This paper explains this phenomenon by arguing that competition from organized crime and limited control of the bureaucratic apparatus make it optimal for rapacious governments not to coordinate the bureaucracy.
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Volume (Year): 167 (2011)
Issue (Month): 2 (June)
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- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
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