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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.
    2. Dmitriy Knyazev, 2023. "How to fight corruption: Carrots and sticks," Economic Inquiry, Western Economic Association International, vol. 61(2), pages 413-429, April.
    3. Kouramoudou Keita & Hannu Laurila, 2016. "Efficient Corruption? Testing the hypothesis in African countries," Working Papers 1699, Tampere University, Faculty of Management and Business, Economics.
    4. Evgeny V. POPOV, 2019. "Business institutions of economic activity digitalization," Upravlenets, Ural State University of Economics, vol. 10(2), pages 2-10, May.
    5. Kimiko Terai & Amihai Glazer, 2019. "Why principals tolerate biases of inaccurate agents," Economics and Politics, Wiley Blackwell, vol. 31(1), pages 97-111, March.

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    More about this item

    Keywords

    corruption; bribery; decentralization;
    All these keywords.

    JEL classification:

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

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