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Graft, Bribes, and the Practice of Corruption
Author(s) -
Carrillo Juan D.
Publication year - 2000
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1430-9134.2000.00231.x-i1
Subject(s) - language change , construct (python library) , set (abstract data type) , measure (data warehouse) , economics , business , microeconomics , public economics , computer science , art , literature , database , programming language
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.