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Decentralized Bribery and Market Participation

  • Popov, Sergey V.

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.

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File URL: http://mpra.ub.uni-muenchen.de/43829/1/MPRA_paper_43829.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43829.

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Date of creation: 26 Sep 2012
Date of revision: 16 Jan 2013
Handle: RePEc:pra:mprapa:43829
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