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Corruption

Author

Listed:
  • Abhijit Banerjee
  • Rema Hanna
  • Sendhil Mullainathan

Abstract

In this paper, a new framework for analyzing corruption in public bureaucracies is provided. The standard way to model corruption is as an example of moral hazard, which then leads to a focus on better monitoring and stricter penalties with the eradication of corruption as the final goal. An alternative approach is proposed which emphasizes why corruption arises in the first place. Corruption is modeled as a consequence of the interaction between the underlying task being performed by bureaucrat, the bureaucrat's private incentives and what the principal can observe and control. This has helped in studying not just corruption but also other distortions that arise simultaneously with corruption, such as red-tape and ultimately, the quality and efficiency of the public services provided, and how these outcomes vary depending on the specific features of this task. The growing empirical literature on corruption is reviewed through this perspective and provide guidance for future empirical research. [BREAD Working Paper No. 329]. URL:[http://ipl.econ.duke.edu/bread/papers/working/329.pdf]

Suggested Citation

  • Abhijit Banerjee & Rema Hanna & Sendhil Mullainathan, 2012. "Corruption," Working Papers id:4952, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:4952
    Note: Institutional Papers
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    Other versions of this item:

    • Abhijit Banerjee & Sendhil Mullainathan & Rema Hanna, 2012. "Corruption," NBER Working Papers 17968, National Bureau of Economic Research, Inc.
    • Banerjee, Abhijit & Hanna, Rema & Mullainathan, Sendhil, 2012. "Corruption," Working Paper Series rwp12-023, Harvard University, John F. Kennedy School of Government.
    • Hanna, Rema N. & Mullainathan, Sendhil & Banerjee, Abhijit, 2012. "Corruption," Scholarly Articles 8830779, Harvard Kennedy School of Government.

    References listed on IDEAS

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    Cited by:

    1. Hathroubi, Salem, 2013. "Epidemic corruption: a bio-economic homology," EconStor Preprints 73558, ZBW - Leibniz Information Centre for Economics.
    2. Mikhail Drugov & John Hamman & Danila Serra, 2014. "Intermediaries in corruption: an experiment," Experimental Economics, Springer;Economic Science Association, vol. 17(1), pages 78-99, March.
    3. Niehaus, Paul & Sukhtankar, Sandip, 2013. "The marginal rate of corruption in public programs: Evidence from India," Journal of Public Economics, Elsevier, vol. 104(C), pages 52-64.
    4. Lee, Wang-Sheng & Guven, Cahit, 2013. "Engaging in corruption: The influence of cultural values and contagion effects at the microlevel," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 287-300.
    5. Fredriksson, Anders, 2014. "Bureaucracy intermediaries, corruption and red tape," Journal of Development Economics, Elsevier, vol. 108(C), pages 256-273.
    6. Jiang, Ting & Nie, Huihua, 2014. "The stained China miracle: Corruption, regulation, and firm performance," Economics Letters, Elsevier, vol. 123(3), pages 366-369.

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    More about this item

    Keywords

    Corruption; poor countries; anti-corruption policies; illicit and secretive; individuals; illicit behaviour; correlations; participants; moral hazard; organizations; bureaucrats; punishment; GDP; officers; universities; hospitals; money;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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