dc.contributor |
Universitat Pompeu Fabra. Departament d'Economia i Empresa |
dc.contributor.author |
Celentani, Marco |
dc.contributor.author |
Ganuza, Juan José |
dc.date |
2001-01-01 |
dc.identifier.citation |
https://econ-papers.upf.edu/ca/paper.php?id=526 |
dc.identifier.citation |
Annals of Operations Research, 109, (2002), pp. 293-315 |
dc.identifier.uri |
http://hdl.handle.net/10230/1023 |
dc.format |
application/pdf |
dc.language.iso |
eng |
dc.relation |
Economics and Business Working Papers Series; 526 |
dc.rights |
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons |
dc.rights |
info:eu-repo/semantics/openAccess |
dc.rights |
http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
dc.subject |
competitive and organized corruption |
dc.subject |
institutional response |
dc.subject |
Microeconomics |
dc.title |
Organized vs. competitive corruption |
dc.type |
info:eu-repo/semantics/workingPaper |
dc.description.abstract |
We study bureaucratic corruption in a model in which a constituency
sets required levels for a given set of activities. Each activity is
carried out by an external provider, and its realization is supervised
by a bureaucrat. While bureaucrats are supposed to act on behalf of the
constituency, they can decide to be corrupt and allow providers to
deliver lower activity levels than contracted in exchange for a bribe.
Given this, the constituency sets the optimal activity levels weighing
off the value of activity levels, their costs, as well as the possibility
for the bureaucrats to be corrupt. We use this setup to study the impact
on equilibrium corruption of the degree of decentralization of corruption.
To do this we compute equilibrium corruption in two different settings:
1) Each bureaucrat acts in such a way as to maximize his own individual
utility (competitive corruption); 2) An illegal syndicate oversee the
corruption decisions of the population of bureaucrats in such a way as
to maximize total proceeds from corruption (organized corruption). We
show that, since average corruption payoff is increasing in the activity
levels set by the constituency, and since the latter responds to high
levels of corruption by reducing required activity levels, in equilibrium
the illegal syndicate acts in such a way as to restrain the total number
of corrupt transactions, so that corruption is lower when it is organized
than when it is competitive. |