A search for an optimal policy in a corrupt system: a note

Meenakshi Rajeev ()

Journal of Developing Areas, 2003, vol. 37, issue 1, 159-172

Abstract: There is a large body of literature on the issue of corruption that looks at policy instruments relating to punishment, incentive and monitoring schemes for the control of crime. In this context many researchers assert that corruption in general cannot be controlled and the extent of it is higher for relatively poorer nations. In a developing country, where the government needs to raise resources from the system to provide necessary public services to the poor, acts relating to the embezzlement of states' potential revenue earnings naturally operates as an impediment to development. This note discusses in a game theoretic framework the different instruments that are available for the control of such pilferage and considers as an example the voluntary income disclosure scheme (VDIS) introduced by successive Indian governments for tax collection.

Date: 2003
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