Paper Info
Title
Organized vs. Competitive Corruption
Abstract
We study bureaucratic corruption in a model in which a constituency sets required levels for a given set of activities. Each activity is carried out by an external provider and its realization is supervised by a bureaucrat. Bureaucrats are supposed to act on behalf of the constituency, but they can allow providers to deliver lower activity levels than contracted in exchange for a bribe. Given this, the constituency sets the optimal activity levels weighing off the value of activity levels, their costs, as well as the possibility for the bureaucrats to be corrupt. We use this setup to study the impact on equilibrium corruption of the degree of decentralization of corruption. To do this we compute equilibrium corruption in two different settings: (1) Each bureaucrat acts in such a way as to maximize his own individual utility (competitive corruption); (2) An illegal syndicate oversees the corruption decisions of the population of bureaucrats in such a way as to maximize total proceeds from corruption (organized corruption). We show that the illegal syndicate acts in such a way as to restrain the total number of corrupt transactions and corruption is lower when it is organized than when it is competitive.
Year
DOI
Venue
2002
10.1023/A:1016364505439
Annals of Operations Research
Keywords
DocType
Volume
competitive and organized corruption,institutional response
Journal
109
Issue
ISSN
Citations 
1-4
1572-9338
0
PageRank 
References 
Authors
0.34
0
2
Name
Order
Citations
PageRank
Marco Celentani100.34
Juan-josé Ganuza241.54