IDEAS home Printed from https://ideas.repec.org/a/wly/soecon/v92y2026i3p689-704.html

Unraveling Corruption and State Capacity With Heterogeneous Productivity

Author

Listed:
  • Diego Carrasco
  • Nhan Buu Phan
  • Shino Takayama

Abstract

We present a model of corruption involving entrepreneurs with heterogeneous productivities. The model incorporates two types of technologies: a costly “good” technology that generates positive externalities and a “bad” technology that is cheaper to adopt but lacks externalities. Corrupt bureaucrats may accept bribes from entrepreneurs using the bad technology, which the government cannot fully monitor. We show that four distinct equilibrium regimes can arise, and we characterize the conditions‐interpretable as dimensions of state capacity‐under which each regime arises. Our analysis aligns with empirical patterns of regional variation in corruption and productivity and provides testable hypotheses linking state capacity, and corruption.

Suggested Citation

  • Diego Carrasco & Nhan Buu Phan & Shino Takayama, 2026. "Unraveling Corruption and State Capacity With Heterogeneous Productivity," Southern Economic Journal, John Wiley & Sons, vol. 92(3), pages 689-704, January.
    • Handle: RePEc:wly:soecon:v:92:y:2026:i:3:p:689-704
    DOI: 10.1002/soej.12789
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/soej.12789
    Download Restriction: no
    File URL: https://libkey.io/10.1002/soej.12789?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:soecon:v:92:y:2026:i:3:p:689-704. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2325-8012 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.