Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-27T21:29:41.016Z Has data issue: false hasContentIssue false
  • English
  • Français

Government Positions for Sale - A Model of Grand Corruption

Published online by Cambridge University Press:  20 January 2017

Hans J. Czap  and
Kanybek D. Nur-tegin
Hans J. Czap
Affiliation:
University of Michigan-Dearborn
Kanybek D. Nur-tegin
Affiliation:
Florida Atlantic University
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper develops a model for a particular type of grand corruption often encountered in developing countries, namely, the sale of government positions by autocratic rulers. A two-stage game is considered, where the autocrat moves first to maximize his revenue from the sale of positions in the cabinet by choosing a price that must be paid by interested politicians. The latter become bureaucrats who maximize their utility from bribe revenues for the given price set by the president. Backward induction yields subgame-perfect equilibrium levels of corruption of the president and bureaucrats. A key insight from this analysis is that conventional tools of fighting corruption become ineffective when corruption at the very top is ignored. The model is distinctive in its treatment of individual moral costs of being corrupt and in its consideration of a revolutionary constraint on the autocrat's choices.

Keywords

bribesgrand corruptionbureaucratsgame
Type
Research Article
Information
Business and Politics , Volume 14 , Issue 2 , August 2012 , pp. 1 - 25
Copyright
Copyright © V.K. Aggarwal 2012 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, Daron and Verdier, Thierry. 1998. “Property Rights, Corruption and the Allocation of Talent: A General Equilibrium Approach.” The Economic Journal 108 (450): 1381–1403.Google Scholar
Andreoni, James and Petrie, Ragan. 2004. “Public goods experiments without confidentiality: A glimpse into fund-raising.” Journal of Public Economics 88 (7): 1605–1623.Google Scholar
Basu, Kaushik, Bhattarcharya, Sudipto, and Mishra, Ajit. 1992. “Notes on Bribery and the Control of Corruption.” Journal of Public Economics 48: 349–359.Google Scholar
Besley, Timothy and McLaren, John. 1993. “Taxes and Bribery: The Role of Wage Incentives.” The Economic Journal 103 (416): 119–141.CrossRefGoogle Scholar
Bliss, Christopher and Tella, Raphael Di. 1997. “Does Competition Kill Corruption?” Journal of Political Economy 105 (5): 1001–1023.Google Scholar
Bosshard, Peter and Lawrence, Shannon. 2006. “The World Bank's Conflicted Corruption Fight.” International Rivers, May 1, 2006, http://www.internationalrivers.org/en/south-asia/pakistan/world-bank%E2%80%99s-conflicted-corruption-fight.Google Scholar
Cadot, Olivier. 1987. “Corruption as a Gamble.” Journal of Public Economics 33: 223–244.Google Scholar
Chand, Sheetal and Moene, Karl. 1999. “Controlling Fiscal Corruption.” World Development 27 (7): 1129–1140.Google Scholar
Clague, Christopher. 1993. “Rule Obedience, Organizational Loyalty, and Economic Development.” Journal of Institutional and Theoretical Economics 149 (2): 393–414.Google Scholar
Czap, Hans Jörg and Czap, Natalia. 2011. “Donating-selling tradeoffs and the influence of leaders in the environmental goods game.” Journal of Socio-Economics 40 (6): 743–752.Google Scholar
Dal Bó, E., Dal Bó, P. and Di Tella, Rafael. 2006. “‘Plata o Plomo?’: Bribe and Punishment in a Theory of Political Influence.” American Political Science Review 100 (1): 41–53.Google Scholar
Echazu, Luciana and Bose, Pinaki. 2008. “Corruption, Centralization, and the Shadow Economy.” Southern Economic Journal 75 (2): 524–537.Google Scholar
Khan, Mushtaq. 2006. “Determinants of Corruption in Developing Countries: The Limits of Conventional Economic Analysis.” In International Handbook on the Economics of Corruption, edited by Rose-Ackerman, Susan. Northampton: Edgar Elgar.Google Scholar
Leff, Nathaniel. 1964. “Economic Development Through Bureaucratic Corruption.” American Behavioral Scientist 8 (3): 8–14.Google Scholar
Leys, C. 1970. “What is the Problem about Corruption?” In Political Corruption: Readings in Comparative Perspective, edited by Heidenheimer, Arnold and Johnston, Michael. New York: Holt, Rinehart and Winston.Google Scholar
Marat, Erica. 2005. “Akayev Officially Resigns While Kulov Declares Candidacy for President.” Eurasia Daily Monitor 2 (66). http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=30208.Google Scholar
Mauro, Paulo. 1995. “Corruption and Growth.” Quarterly Journal of Economics 110 (3): 681–712.Google Scholar
Mishra, Ajit. 2006. “Corruption, hierarchies and bureaucratic structure.” In International Handbook on the Economics of Corruption, edited by Rose-Ackerman, Susan. Northampton: Edgar Elgar.Google Scholar
Mocan, Naci. 2008. “What Determines Corruption? International Evidence from Microdata.” Economic Inquiry 46 (4): 493–510.Google Scholar
Moody-Stuart, George. 1997. Grand Corruption. How Business Bribes Damage Developing Countries, Oxford, UK: WorldView Publishing.Google Scholar
Mookerhjee, Dilip and Png, Ivan. 1995. “Corruptible Law Enforcers: How Should they be Compensated?” The Economic Journal 105 (428): 145–159.Google Scholar
Moxnes, Eline and van der Heijden, Erling. 2003. “The effect of leadership in a public bad experiment.” Journal of Conflict Resolution 47 (6): 773–795.Google Scholar
Murphy, Kevin, Shleifer, Andrei, and Vishny, Robert. 1991. “The Allocation of Talent: Implications for Growth.” Quarterly Journal of Economics 106 (2): 503–530.CrossRefGoogle Scholar
Murphy, Kevin, Shleifer, Andrei, and Vishny, Robert. 1993. “Why is Rent-Seeking So Costly to Growth?” American Economic Review 83 (2) Papers and Proceedings of the Hundred and Fifth Annual Meeting of the American Economic Association: 409-414.Google Scholar
Olsen, Trond and Torsvik, Gaute. 1998. “Collusion and Renegotiation in Hierarchies: A Case of Beneficial Corruption.” International Economic Review 39 (2): 413–438.Google Scholar
Rose-Ackerman, Susan. 1999. Corruption and Government–Causes, Consequences, and Reform. New York, NY: Cambridge University Press.Google Scholar
Rose-Akerman, Susan ed. 2006. International Handbook on the Economics of Corruption. Northampton, MA: Edward Elgar.Google Scholar
Shleifer, Andrei and Vishny, Robert. 1993. “Corruption.” Quarterly Journal of Economics 108 (3): 599–617.Google Scholar
Svensson, Jacob. 2003. “Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms.” Quarterly Journal of Economics 118 (1): 207–230.Google Scholar
International, Transparency. 2010. “Transparency International–Global Corruption Barometer 2010.” www.transparency.org.Google Scholar
Van Rijckeghem, Caroline and Weder, Beatrice. 1997. “Corruption and the Role of Temptation: Do Low Wages in Civil Service Cause Corruption?” IMF Working Paper, WP/97/73.Google Scholar
Wade, Robert. 1982. “The System of Adminsitrative and Political Corruption: Canal Irrigation in South India.” Journal of Development Studies 18: 287–328.Google Scholar
Wade, Robert. 1984. “Irrigation Reforms in Conditions of Populist Anarchy.” Journal of Development Economics 14: 285–303.Google Scholar
Waller, Christopher, Verdier, Thierry, and Gardner, Roy. 2002. “Corruption: Top Down or Bottom Up?” Economic Inquiry 40 (4): 688–703.Google Scholar