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Petty corruption and citizen feedback

Author

Listed:
  • Charles Angelucci

    (Columbia Business School)

  • Antonio Russo

    (ETH Zurich and CESifo)

Abstract

Numerous countries are introducing citizen feedback schemes to tame corruption. We study how best to incorporate feedback in public officials’ incentives. The main novelty of our proposal is to allow citizens to directly influence officials’ pay. We consider a situation in which entrepreneurs must comply with regulation before undertaking a risky activity. Officials verify compliance to determine whether to grant permits, and may engage in either bribery or extortion. Without feedback, the government has no choice but to tolerate bribery, which leads to too many permits being granted and large negative externalities. By contrast, implementing a feedback scheme that (i) rewards entrepreneurs filing complaints and (ii) ties officials’ pay to these complaints makes deterring both bribery and extortion possible. Our proposed scheme does not require the government to be able to verify the accuracy of complaints. In an extension, we incorporate the role played by intermediaries, and show their involvement makes the feedback scheme even more valuable.

Suggested Citation

  • Charles Angelucci & Antonio Russo, 2015. "Petty corruption and citizen feedback," Working Papers 2015/25, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2015-25
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    References listed on IDEAS

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    Cited by:

    1. Jun Hu, 2021. "Asymmetric punishment, Leniency and Harassment Bribes in China: a selective survey," Working Papers hal-03119491, HAL.

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    More about this item

    Keywords

    Corruption; extortion; bribery; citizen feedback; bureaucracy intermediaries;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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