Committing to transparency to resist corruption

Frederic Koessler and Ariane Lambert-Mogiliansky ()
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Ariane Lambert-Mogiliansky: PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: This paper studies firms' incentives to commit to transparent behavior in a competitive procedure modeled as an asymmetric information beauty contest managed by a corrupt agent. In his evaluation of firms' offers for a public contract the agent has some discretion to favor a firm in exchange for a bribe. While unilateral commitment to transparency is never incentive compatible, under some circumstances a voluntary but conditional commitment mechanism can eliminate corruption. A low quality firm may prefer not to commit only when the agent's discretion is strong and the market's profitability is small. In that situation, the high quality firms commit when commitment decisions are kept secret, but some conditions on firms' beliefs are required when commitment decisions are publicly announced. A mechanism combining both conditionality and a reward (a transparent selection advantage that needs not be large) allows complete elimination of corruption.

Keywords: Commitment; Bribery; Competitive procedures; Transparency (search for similar items in EconPapers)
Date: 2013-01
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Citations: View citations in EconPapers (6)

Published in Journal of Development Economics, 2013, 100 (1), pp.117-126. ⟨10.1016/j.jdeveco.2012.08.006⟩

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Related works:
Journal Article: Committing to transparency to resist corruption (2013)
Working Paper: Committing to transparency to resist corruption (2013)
Working Paper: Committing to transparency to resist corruption (2010)
Working Paper: Committing to transparency to resist corruption (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754616

DOI: 10.1016/j.jdeveco.2012.08.006

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