Beneficial collusion in corruption control: the case of nonmonetary penalties

Baç, Mehmet and Bag, Parimal Kanti (2006) Beneficial collusion in corruption control: the case of nonmonetary penalties. Journal of development economics, 81 (2). pp. 478-499. ISSN 0304-3878

[thumbnail of 3011800000749.pdf] PDF
Restricted to Registered users only

Download (336kB) | Request a copy


We analyze a corruption model where a principal seeks to control an agent's corruption by supplementing a costless noncollusive outside detector such as the media with a collusive internal supervisor. The principal's objective is to minimize the overall costs, made up of enforcement costs and social costs of corruption. If the penalties on the corrupt agent and a failing supervisor are nonmonetary in nature and yet the two parties can engage in monetary side-transfers, the principal may stand to benefit by allowing supervisoragent collusion. This benefit may even prompt the principal to actively encourage collusion by hiring a dishonest supervisor in strict preference over an honest supervisor.
Item Type: Article
Uncontrolled Keywords: corruption; monitoring; collusion; bounty hunter mechanism
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Arts and Social Sciences
Depositing User: Mehmet Baç
Date Deposited: 20 Feb 2007 02:00
Last Modified: 26 Apr 2022 08:04

Actions (login required)

View Item
View Item