The microeconomics of corruption

Roberto Burguet, Juan-José Ganuza and José G Montalvo

Chapter 16 in Handbook of Game Theory and Industrial Organization, Volume II, 2018, pp 420-450 from Edward Elgar Publishing

Abstract: We review microeconomic research on corruption from the last 30 years. We start by analyzing the seminal models of corruption built on three-tier, delegation models. Then, we go into more detail on the context of corrupt deals, and discuss the main economic factors that affect corruption. We discuss incentives and compensation in bureaucracies, and the interplay of market and bureaucratic structure. Competition and contract design will also be reviewed in relation to procurement under corruptible agents. After reviewing the theoretical contributions, we turn to the empirical evidence. We begin discussing measurement issues, and then move to the analysis of the empirical evidence relative to the theoretical models discussed in previous sections. Finally, we cover several anti-corruption mechanisms proposed in the literature and discuss their relative merits as devices to control or eliminate illegal activities.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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