Persistent Court Corruption

Philip Bond

Economic Journal, 2008, vol. 118, issue 531, 1333-1353

Abstract: Corruption among court officials varies widely across countries and exhibits considerable intertemporal persistence. I present a model of court corruption in which there are multiple equilibria, differentiated by corruption levels. In the model, courts provide incentives for individuals to take/abstain from certain actions. High corruption levels undermine incentive provision and necessitate larger penalties. Larger penalties in turn increase the potential bribes that a court official can collect and so attract more dishonest officials to court employment. This feedback effect generates multiple equilibria. Paying court officials wages sufficiently above the market-clearing rate can eliminate the high corruption equilibrium. Copyright (C) The Author(s). Journal compilation (C) Royal Economic Society 2008.

Date: 2008
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