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Petty Corruption and Citizen Reports

Author

Listed:
  • Charles Angelucci
  • Antonio Russo

Abstract

To enforce regulations, governments often delegate power to public officials. However, officials may have incentives to abuse their discretionary power and engage in bribery or extortion. Efforts to monitor and curb such abuses have inspired interest in using new communication technologies to gather information directly from citizens. In our model, entrepreneurs must comply with regulations before undertaking an activity. Officials verify their compliance and may engage in corruption. In line with existing work, the government tolerates corruption and weak enforcement when it does not communicate with entrepreneurs. However, we show that a simple incentive scheme in which entrepreneurs can report noncompliance both deters corruption and improves regulatory enforcement. In an extension, we incorporate intermediaries and show their presence makes the scheme more valuable.

Suggested Citation

  • Charles Angelucci & Antonio Russo, 2015. "Petty Corruption and Citizen Reports," CESifo Working Paper Series 5528, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_5528
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp5528.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    corruption; extortion; self-reporting; bureaucracy intermediaries;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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