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.

Date: 2008
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