Kleptocracy and corruption

Research output: Journal PublicationsJournal Article (refereed)

4 Citations (Scopus)

Abstract

In this paper, we develop a model that analyzes the competition and strategic interactions between a kleptocratic ruler and his officials in rent seeking. The ruler implements anti-corruption measures, which include wage incentives and monitoring, to discourage his opportunistic officials from seeking bribes to obtain more rent for himself. We show that the ruler pays an efficiency wage to his officials to eliminate corruption if and only if monitoring is relatively effective. We also demonstrate that, in a proprietary state, the ruler always sets an inefficiently high tax rate in order to discourage the officials from demanding bribes.
Original languageEnglish
Pages (from-to)57-74
Number of pages18
JournalJournal of Comparative Economics
Volume34
Issue number1
DOIs
Publication statusPublished - 1 Mar 2006

Fingerprint

Bribes
Monitoring
Corruption
Efficiency wages
Tax rate
Wages
Incentives
Rent-seeking
Rent
Strategic interaction
Anti-corruption

Keywords

  • Corruption
  • Corruption deterrence
  • Kleptocracy
  • Rent-seeking competition

Cite this

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title = "Kleptocracy and corruption",
abstract = "In this paper, we develop a model that analyzes the competition and strategic interactions between a kleptocratic ruler and his officials in rent seeking. The ruler implements anti-corruption measures, which include wage incentives and monitoring, to discourage his opportunistic officials from seeking bribes to obtain more rent for himself. We show that the ruler pays an efficiency wage to his officials to eliminate corruption if and only if monitoring is relatively effective. We also demonstrate that, in a proprietary state, the ruler always sets an inefficiently high tax rate in order to discourage the officials from demanding bribes.",
keywords = "Corruption, Corruption deterrence, Kleptocracy, Rent-seeking competition",
author = "FAN, {Chengze, Simon}",
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volume = "34",
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Kleptocracy and corruption. / FAN, Chengze, Simon.

In: Journal of Comparative Economics, Vol. 34, No. 1, 01.03.2006, p. 57-74.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - Kleptocracy and corruption

AU - FAN, Chengze, Simon

PY - 2006/3/1

Y1 - 2006/3/1

N2 - In this paper, we develop a model that analyzes the competition and strategic interactions between a kleptocratic ruler and his officials in rent seeking. The ruler implements anti-corruption measures, which include wage incentives and monitoring, to discourage his opportunistic officials from seeking bribes to obtain more rent for himself. We show that the ruler pays an efficiency wage to his officials to eliminate corruption if and only if monitoring is relatively effective. We also demonstrate that, in a proprietary state, the ruler always sets an inefficiently high tax rate in order to discourage the officials from demanding bribes.

AB - In this paper, we develop a model that analyzes the competition and strategic interactions between a kleptocratic ruler and his officials in rent seeking. The ruler implements anti-corruption measures, which include wage incentives and monitoring, to discourage his opportunistic officials from seeking bribes to obtain more rent for himself. We show that the ruler pays an efficiency wage to his officials to eliminate corruption if and only if monitoring is relatively effective. We also demonstrate that, in a proprietary state, the ruler always sets an inefficiently high tax rate in order to discourage the officials from demanding bribes.

KW - Corruption

KW - Corruption deterrence

KW - Kleptocracy

KW - Rent-seeking competition

UR - http://commons.ln.edu.hk/sw_master/2310

U2 - 10.1016/j.jce.2005.11.001

DO - 10.1016/j.jce.2005.11.001

M3 - Journal Article (refereed)

VL - 34

SP - 57

EP - 74

JO - Journal of Comparative Economics

JF - Journal of Comparative Economics

SN - 0147-5967

IS - 1

ER -