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Leading bureaucracies to the tipping point: An alternative model of multiple stable equilibrium levels of corruption

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  • Caulkins, Jonathan P.
  • Feichtinger, Gustav
  • Grass, Dieter
  • Hartl, Richard F.
  • Kort, Peter M.
  • Novak, Andreas J.
  • Seidl, Andrea

Abstract

We present a novel model of corruption dynamics in the form of a nonlinear optimal dynamic control problem. It has a tipping point, but one whose origins and character are distinct from that in the classic Schelling (1978) model. The decision maker choosing a level of corruption is the chief or some other kind of authority figure who presides over a bureaucracy whose state of corruption is influenced by the authority figure’s actions, and whose state in turn influences the pay-off for the authority figure. The policy interpretation is somewhat more optimistic than in other tipping models, and there are some surprising implications, notably that reforming the bureaucracy may be of limited value if the bureaucracy takes its cues from a corrupt leader.

Suggested Citation

  • Caulkins, Jonathan P. & Feichtinger, Gustav & Grass, Dieter & Hartl, Richard F. & Kort, Peter M. & Novak, Andreas J. & Seidl, Andrea, 2013. "Leading bureaucracies to the tipping point: An alternative model of multiple stable equilibrium levels of corruption," European Journal of Operational Research, Elsevier, vol. 225(3), pages 541-546.
    • Handle: RePEc:eee:ejores:v:225:y:2013:i:3:p:541-546
    DOI: 10.1016/j.ejor.2012.10.026
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    References listed on IDEAS

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    1. Dieter Grass & Jonathan P. Caulkins & Gustav Feichtinger & Gernot Tragler & Doris A. Behrens, 2008. "Optimal Control of Nonlinear Processes," Springer Books, Springer, number 978-3-540-77647-5, December.
    2. Andvig, Jens Chr. & Moene, Karl Ove, 1990. "How corruption may corrupt," Journal of Economic Behavior & Organization, Elsevier, vol. 13(1), pages 63-76, January.
    3. Feichtinger, Gustav & Grienauer, Waltraud & Tragler, Gernot, 2002. "Optimal dynamic law enforcement," European Journal of Operational Research, Elsevier, vol. 141(1), pages 58-69, August.
    4. Blackburn, Keith & Bose, Niloy & Emranul Haque, M., 2006. "The incidence and persistence of corruption in economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2447-2467, December.
    5. Herbert Dawid & Gustav Feichtinger, 1996. "On the persistence of corruption," Journal of Economics, Springer, vol. 64(2), pages 177-193, June.
    6. Caulkins, Jonathan P. & Feichtinger, Gustav & Tragler, Gernot & Wallner, Dagmar, 2010. "When in a drug epidemic should the policy objective switch from use reduction to harm reduction?," European Journal of Operational Research, Elsevier, vol. 201(1), pages 308-318, February.
    7. Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November.
    8. Mishra, Ajit, 2006. "Persistence of corruption: some theoretical perspectives," World Development, Elsevier, vol. 34(2), pages 349-358, February.
    9. DeTombe, Dorien J., 2002. "Complex Societal Problems in Operational Research," European Journal of Operational Research, Elsevier, vol. 140(2), pages 232-240, July.
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    Cited by:

    1. Jonathan P. Caulkins & Gustav Feichtinger & Dieter Grass & Richard F. Hartl & Peter M. Kort & Andreas J. Novak & Andrea Seidl & Franz Wirl, 2014. "A Dynamic Analysis of Schelling’s Binary Corruption Model: A Competitive Equilibrium Approach," Journal of Optimization Theory and Applications, Springer, vol. 161(2), pages 608-625, May.
    2. Hathroubi, Salem, 2013. "Epidemic corruption: a bio-economic homology," EconStor Preprints 73558, ZBW - Leibniz Information Centre for Economics.
    3. Markellos, Raphael N. & Psychoyios, Dimitris & Schneider, Friedrich, 2016. "Sovereign debt markets in light of the shadow economy," European Journal of Operational Research, Elsevier, vol. 252(1), pages 220-231.

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