The Determinants of the Contract of Corruption: Theory and Evidence

Salvatore Capasso and Lodovico Santoro
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Lodovico Santoro: Institute for Research on Innovation and Services for Development (IRISS) - CNR, Italy

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper develops the notion that corruption is a contract between a public official and a private agent and that the features of this contract depend on the allocation of bargaining power between the parties. Active corruption thus occurs when the public official fixes the terms of the contract and is otherwise considered passive. Employing Italian data on various corruption-based regional-level crimes, the paper empirically reassesses the causes of corruption. A simple theoretical model highlights the differences between these two forms of corruption in terms of bribery and emphasizes the implications both for aggregate corruption and its measurement.

Keywords: active corruption; passive corruption; bargaining power (search for similar items in EconPapers)
JEL-codes: D73 H57 (search for similar items in EconPapers)
Date: 2016-02-11
New Economics Papers: this item is included in nep-cta
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:429

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