Policy Reforms May Increase Petty Corruption

May 26, 2008

A study in the International Journal of Economic Theory published by Wiley-Blackwell finds that certain proposed reforms intended to reduce petty corruption can actually have the opposite effect and increase the occurrence of corruption and bribes.

The paper titled “Petty Corruption: A Game-Theoretic Approach” explores a game theoretic model of petty corruption that occurs when entrepreneurs have to deal with low level bureaucrats to get approvals of specific privileges, from approval of loans from state owned banks to getting a passport.

The authors – Dr. Roy Radner, Dr. Ariane Lambert-Mogiliansky and Dr. Mukul Majumdar – use this ‘game theory’ to assess proposed policy reforms intended to lower the level of corruption, and find that not all are effective in reducing corruption levels.

"Situations that are identical from an economic point of view can lead to significantly different levels of bribery. Therefore certain proposed 'reforms' may actually lead to an increase in the level of bribes", says Dr. Radner.

Petty corruption refers to small bribes given to officials to expedite a transaction or increase the chances of an application’s approval. Such corruption has been shown to lower the level of economic activity, especially in developing countries, thus slowing their rates of economic growth.

Dr. Radner adds. “The total impact of small and petty bribes on the efficiency and welfare of an economy is substantial and has been described as ‘anti-poor, anti-development, anti-growth and anti-investment’. More importantly, it creates an environment that undermines the legitimacy of the state.”

Source: Wiley

Explore further: Government corruption in South Africa contributes to overfishing

Related Stories

Global corporate responsibility goes beyond banning bribes

February 5, 2014

(Phys.org) —Companies must see combating corruption and promoting human rights as connected and complementary moral duties in the countries where they operate, according to researchers at the University of Michigan's Ross ...

Recommended for you

48-million-year-old horse-like fetus discovered in Germany

October 7, 2015

A 48 million year-old horse-like equoid fetus has been discovered at the Messel pit near Frankfurt, Germany according to a study published October 7, 2015 in the open-access journal PLOS ONE by Jens Lorenz Franzen from Senckenberg ...

Chimpanzees shed light on origins of human walking

October 6, 2015

A research team led by Stony Brook University investigating human and chimpanzee locomotion have uncovered unexpected similarities in the way the two species use their upper body during two-legged walking. The results, reported ...

How much for that Nobel prize in the window?

October 3, 2015

No need to make peace in the Middle East, resolve one of science's great mysteries or pen a masterpiece: the easiest way to get yourself a Nobel prize may be to buy one.

The dark side of Nobel prizewinning research

October 4, 2015

Think of the Nobel prizes and you think of groundbreaking research bettering mankind, but the awards have also honoured some quite unhumanitarian inventions such as chemical weapons, DDT and lobotomies.

Who you gonna trust? How power affects our faith in others

October 6, 2015

One of the ongoing themes of the current presidential campaign is that Americans are becoming increasingly distrustful of those who walk the corridors of power – Exhibit A being the Republican presidential primary, in which ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.