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On Basu's Proposal: Fines Affect Bribes

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  • Sergey V. Popov

Abstract

I provide a model that connects the bribe amount with the fines imposed on both bribe-taker and bribe-payer. I show that the proposal of Basu (2011) to not punish bribe-payers to induce whistleblowing does not have to help lower bribes. Higher fines on bribe-takers will make them ask for larger bribes, whereas lowering fines for bribe-paying on bribe-payers might increase their willingness to pay the bribe. An increase in transparency, if achieved, effectively increases both fines simultaneously.

Suggested Citation

  • Sergey V. Popov, 2016. "On Basu's Proposal: Fines Affect Bribes," Economics Working Papers 16-04, Queen's Management School, Queen's University Belfast.
    • Handle: RePEc:qub:wpaper:1604
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    References listed on IDEAS

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    Cited by:

    1. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.

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    JEL classification:

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

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