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Decentralized Bribery and Market Participation

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  • Popov, Sergey V.

Abstract

I propose a bribery model with decentralized bureaucratic decisionmaking. There are multiple stable equilibria: high levels of bribery reduce the economy's productivity due to suppression of small businesses, and reduces the total graft even though it might increase the individual bribe amount. The coordinated deviation to a better participation equilibrium is impossible due to decentralization. Anti-corruption efforts, even temporary, might be useful if they invite better participation.

Suggested Citation

  • Popov, Sergey V., 2012. "Decentralized Bribery and Market Participation," MPRA Paper 43829, University Library of Munich, Germany, revised 16 Jan 2013.
  • Handle: RePEc:pra:mprapa:43829
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    References listed on IDEAS

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    Cited by:

    1. Sergey V. Popov, 2016. "On Basu's Proposal: Fines Affect Bribes," Economics Working Papers 16-04, Queen's Management School, Queen's University Belfast.

    More about this item

    Keywords

    corruption; bribery; decentralization;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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