Committing to transparency to resist corruption

Frederic Koessler and Ariane Lambert-Mogiliansky

Journal of Development Economics, 2013, vol. 100, issue 1, 117-126

Abstract: This paper studies firms' incentives to commit to transparent behavior in a competitive procedure modeled as an asymmetric information beauty contest managed by a corrupt agent. In his evaluation of firms' offers for a public contract the agent has some discretion to favor a firm in exchange for a bribe. While unilateral commitment to transparency is never incentive compatible, under some circumstances a voluntary but conditional commitment mechanism can eliminate corruption. A low quality firm may prefer not to commit only when the agent's discretion is strong and the market's profitability is small. In that situation, the high quality firms commit when commitment decisions are kept secret, but some conditions on firms' beliefs are required when commitment decisions are publicly announced. A mechanism combining both conditionality and a reward (a transparent selection advantage that needs not be large) allows complete elimination of corruption.

Keywords: Commitment; Bribery; Competitive procedures; Transparency (search for similar items in EconPapers)
JEL-codes: C72 D21 D73 H57 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Committing to transparency to resist corruption (2013)
Working Paper: Committing to transparency to resist corruption (2013)
Working Paper: Committing to transparency to resist corruption (2010)
Working Paper: Committing to transparency to resist corruption (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:100:y:2013:i:1:p:117-126

DOI: 10.1016/j.jdeveco.2012.08.006

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