Graft, bribes, and the practice of corruption

Juan Carrillo

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: We construct a dynamic model of corruption in organizations where officials privately know their propensity for corruption and clients optimally choose the bribe offered. We show that there is a continuum set of stationary bribe equilibria due exclusively to the dynamic nature of the model and the endogenous determination of bribes. This can explain why similar countries have stable but different "implicit prices " for the same illegal services. We also show that, by not considering the reaction of clients, traditional analysis have systematically overestimated the beneficial effect of increasing wages as an anticorruption measure.

Date: 2000
Note: SCOPUS: ar.j
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Citations: View citations in EconPapers (8)

Published in: Journal of economics & management strategy (2000) v.9 n° 3,p.257-286

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Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/167083

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