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Wages and Sanctions against Hierarchical Corruption

Author

Listed:
  • Fadi KANSO

    () (CERGAM-CAE, Aix-Marseille Université)

Abstract

The general aim of this paper is to contribute to the study of factors that decrease corruption in the public sector and especially in tax administration. A matter of particular interest will be the effects of raising civil servants’ wages and penalties on the behavior of agents in case of tax evasion. We will also look into the role of civil society and the dismissal sanction in a country of high level of unemployment in the fight against corruption. Using a model referring to a typical agency problem, we will demonstrate how the coalition among civil servants and taxpayers may be broken in order to curb tax evasion and the incidence of corruption.

Suggested Citation

  • Fadi KANSO, 2007. "Wages and Sanctions against Hierarchical Corruption," CAE Working Papers 51, Aix-Marseille Université, CERGAM.
  • Handle: RePEc:cgm:wpaper:51
    as

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    File URL: http://junon.u-3mrs.fr/afa10w21/RePEc/cgm/wpaper/DR_51_0607_kanso.pdf
    File Function: First version, 2007
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    References listed on IDEAS

    as
    1. Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-159, January.
    2. Srinivasan, T. N., 1973. "Tax evasion: A model," Journal of Public Economics, Elsevier, vol. 2(4), pages 339-346.
    3. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    4. Basu, Kaushik & Bhattacharya, Sudipto & Mishra, Ajit, 1992. "Notes on bribery and the control of corruption," Journal of Public Economics, Elsevier, vol. 48(3), pages 349-359, August.
    5. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
    6. Nadeem Ul Haque & Ratna Sahay, 1996. "Do Government Wage Cuts Close Budget Deficits? Costs of Corruption," IMF Staff Papers, Palgrave Macmillan, vol. 43(4), pages 754-778, December.
    7. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February.
    8. Van Rijckeghem, Caroline & Weder, Beatrice, 2001. "Bureaucratic corruption and the rate of temptation: do wages in the civil service affect corruption, and by how much?," Journal of Development Economics, Elsevier, vol. 65(2), pages 307-331, August.
    9. Wane, Waly, 2000. "Tax evasion, corruption, and the remuneration of heterogeneous inspectors," Policy Research Working Paper Series 2394, The World Bank.
    10. Vito Tanzi, 1994. "Corruption, Governmental Activities, and Markets," IMF Working Papers 94/99, International Monetary Fund.
    11. Besley, Timothy & McLaren, John, 1993. "Taxes and Bribery: The Role of Wage Incentives," Economic Journal, Royal Economic Society, vol. 103(416), pages 119-141, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Governmental corruption; tax evasion; coalition; game theory; behavioral of economic agents; wages and penalties in public sector;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H1 - Public Economics - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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