Canals, climate, and corruption: The provisioning of public infrastructure under uncertainty

Sechindra Vallury and Bryan Leonard

Economics and Politics, 2022, vol. 34, issue 1, 221-252

Abstract: We develop a two‐stage model to study the strategic interaction between a politician (the principal) and a bureaucrat (the agent) over the level of infrastructure provision with uncertainty about possible weather shocks. The bureaucrat chooses how much effort to contribute to infrastructure maintenance and the politician offers either a lump‐sum wage (non‐corrupt) contract or proportional bribe (corrupt) contract to induce effort. The degree of uncertainty about weather shocks, the size of the fixed wage, and the level of external monitoring to detect corruption all interact to affect (a) the politician's choice of contract and (b) whether this choice improves infrastructure outcomes. Our results suggest that curbing corruption is most likely to yield improvements in infrastructure provision when climate uncertainty is low and when bureaucratic wages are relatively high. If climate uncertainty is high, increasing monitoring has an unambiguous negative effect on infrastructure provision. Previous literature has focused either on public goods provision but not corruption or on bribery in a regulatory context that lacks public goods provision. We extend both literatures by analyzing how bribes between government officials affect a principal's ability to more effectively incentivize public goods provision by her agent.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/ecpo.12196

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecopol:v:34:y:2022:i:1:p:221-252

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0954-1985

Access Statistics for this article

Economics and Politics is currently edited by Peter Rosendorff

More articles in Economics and Politics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().