Gift policy, bribes and corruption

Mehmet Bac ()
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Mehmet Bac: Sabanci University

European Journal of Law and Economics, 2019, vol. 47, issue 2, No 4, 255-275

Abstract: Abstract A ban on gifts in public offices partially deters bribery but may induce undeterred bribers to switch from gifts to money. The rise in the use of a more liquid instrument (money) increases the bribe acceptance rate and, possibly, the measure of unqualified applications approved by the office. A gift ban may thus amplify the social costs of corruption by allocating public resources to the wrong people. It is shown that the optimal limited gift ban with a value cap binding on “expensive” gifts dominates the free gifts policy. The limited ban has weaker deterrence than the complete ban but it may reduce the social costs of corruption by minimizing the switch from gifts to money.

Keywords: Gifts; Liquidity; Bribery; Public policy; Social costs (search for similar items in EconPapers)
JEL-codes: H83 K42 O17 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10657-019-09611-y

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