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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Incorporated in Westminster
T2 - Channels and Returns to Political Connection in the United Kingdom
AU - Green, Colin
AU - Homroy, Swarnodeep
PY - 2022/4/30
Y1 - 2022/4/30
N2 - We present a simple agency model with a revenue-maximizing government and many public officials (agents) in charge of collecting payments from citizens. Agents are of two types, honest and potentially dishonest, with the latter having an inherent propensity to demand bribes from citizens. This propensity may eventually turn into actual (perceived) corruption depending on the strategy pursued by the government. In equilibrium, we derive a non-linear relationship between potential and perceived corruption and, specifically, three distinct policy regimes in which the opportunistic behaviour is curbed, eradicated or tolerated. Different regimes are characterized by different bureaucracy sizes, and we conjecture that low levels of perceived corruption may, in some circumstances, be due to a dilution effect of bribery cases on large numbers of public employees. Some simple descriptive evidence on European regions appears to confirm our theoretical insights.
AB - We present a simple agency model with a revenue-maximizing government and many public officials (agents) in charge of collecting payments from citizens. Agents are of two types, honest and potentially dishonest, with the latter having an inherent propensity to demand bribes from citizens. This propensity may eventually turn into actual (perceived) corruption depending on the strategy pursued by the government. In equilibrium, we derive a non-linear relationship between potential and perceived corruption and, specifically, three distinct policy regimes in which the opportunistic behaviour is curbed, eradicated or tolerated. Different regimes are characterized by different bureaucracy sizes, and we conjecture that low levels of perceived corruption may, in some circumstances, be due to a dilution effect of bribery cases on large numbers of public employees. Some simple descriptive evidence on European regions appears to confirm our theoretical insights.
U2 - 10.1111/ecca.12402
DO - 10.1111/ecca.12402
M3 - Journal article
VL - 89
SP - 377
EP - 408
JO - Economica
JF - Economica
SN - 0013-0427
IS - 354
ER -