How corruptible are you? Bribery under uncertainty
We model corruption in a society as a result of bargaining for bribes between private citizens and public officials. We investigate the role that incomplete information with respect to the intrinsic moral cost of one's potential corruption partner plays out in his or her propensity to engage in bribery, and, consequently, the equilibrium level of corruption in the society. We assume that the cost of engaging in corruption is subject to strategic complementarities, which may lead to multiple corruption equilibria. We find that corruption is lowest when potential bribers and potential bribees are uncertain regarding each other's "corruptibility" and have asymmetric bargaining powers. Our uncertainty result provides theoretical support in favor of anti-corruption strategies, such as staff rotation in public offices, aimed at decreasing the social closeness of bribers and bribees. Our bargaining power result suggests that, under uncertainty, monopolistic public good provision has the same corruption-reducing effect as competitive public good provision.
|Date of creation:||Sep 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.coss.fsu.edu/economics/
More information through EDIRC
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andvig, J.C. & Ove Moene, K., 1988.
"How Corruption May Corrupt,"
20/1988, Oslo University, Department of Economics.
- Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November.
- Sanjeev Gupta, 1998. "Does Corruption Affect Income Inequality and Poverty?," IMF Working Papers 98/76, International Monetary Fund.
- Svensson, Jakob, 2002.
"Who Must Pay Bribes and How Much? Evidence from a cross-section of firms,"
713, Stockholm University, Institute for International Economic Studies.
- Jakob Svensson, 2003. "Who Must Pay Bribes And How Much? Evidence From A Cross Section Of Firms," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 207-230, February.
- Svensson, Jakob, 2000. "Who must pay bribes and how much? Evidence from a cross-section of firms," Policy Research Working Paper Series 2486, The World Bank.
- Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Gary S. Becker, 1968.
"Crime and Punishment: An Economic Approach,"
Journal of Political Economy,
University of Chicago Press, vol. 76, pages 169.
- Drugov, Mikhail, 2010. "Competition in bureaucracy and corruption," Journal of Development Economics, Elsevier, vol. 92(2), pages 107-114, July.
- Myerson, Roger B. & Satterthwaite, Mark A., 1983.
"Efficient mechanisms for bilateral trading,"
Journal of Economic Theory,
Elsevier, vol. 29(2), pages 265-281, April.
- Hauk, Esther & Saez-Marti, Maria, 2002.
"On the Cultural Transmission of Corruption,"
Journal of Economic Theory,
Elsevier, vol. 107(2), pages 311-335, December.
- Esther Hauk & Maria Sáez, 1999. "On the cultural transmission of corruption," Economics Working Papers 392, Department of Economics and Business, Universitat Pompeu Fabra.
- Hauk, Esther & Sáez-Martí, María, 2001. "On the Cultural Transmission of Corruption," Working Paper Series 564, Research Institute of Industrial Economics.
- Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence From a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 678-704, May.
- Cadot, Olivier, 1987. "Corruption as a gamble," Journal of Public Economics, Elsevier, vol. 33(2), pages 223-244, July.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
When requesting a correction, please mention this item's handle: RePEc:fsu:wpaper:wp2010_09_01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dmitry Ryvkin)
If references are entirely missing, you can add them using this form.