Corruption

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Corruption

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Title: Corruption
Author: Banerjee, Abhijit; Hanna, Rema N.; Mullainathan, Sendhil

Note: Order does not necessarily reflect citation order of authors.

Citation: Banerjee, Abhijit, Rema Hanna, and Sendhil Mullainathan. 2012. Corruption. HKS Faculty Research Working Paper Series RWP12-023,John F. Kennedy School of Government, Harvard University.
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Abstract: In this paper, we provide a new framework for analyzing corruption in public bureaucracies. The standard way to model corruption is as an example of moral hazard, which then leads to a focus on better monitoring and stricter penalties with the eradication of corruption as the final goal. We propose an alternative approach which emphasizes why corruption arises in the first place. Corruption is modeled as a consequence of the interaction between the underlying task being performed by bureaucrat, the bureaucrat's private incentives and what the principal can observe and control. This allows us to study not just corruption but also other distortions that arise simultaneously with corruption, such as red-tape and ultimately, the quality and efficiency of the public services provided, and how these outcomes vary depending on the specific features of this task. We then review the growing empirical literature on corruption through this perspective and provide guidance for future empirical research.
Published Version: http://web.hks.harvard.edu/publications/workingpapers/citation.aspx?PubId=8409
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:8830779
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