Petty Corruption and Citizen Reports

Charles Angelucci and Antonio Russo

No 5528, CESifo Working Paper Series from CESifo

Abstract: To enforce regulations, governments often delegate power to public officials. However, officials may have incentives to abuse their discretionary power and engage in bribery or extortion. Efforts to monitor and curb such abuses have inspired interest in using new communication technologies to gather information directly from citizens. In our model, entrepreneurs must comply with regulations before undertaking an activity. Officials verify their compliance and may engage in corruption. In line with existing work, the government tolerates corruption and weak enforcement when it does not communicate with entrepreneurs. However, we show that a simple incentive scheme in which entrepreneurs can report noncompliance both deters corruption and improves regulatory enforcement. In an extension, we incorporate intermediaries and show their presence makes the scheme more valuable.

Keywords: corruption; extortion; self-reporting; bureaucracy intermediaries (search for similar items in EconPapers)
JEL-codes: D73 H11 H83 O17 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5528

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