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: History books spark latest Texas classroom battle

add to favorites email to friend print save as pdf

Related Stories

Peacock's train is not such a drag

20 minutes ago

The magnificent plumage of the peacock may not be quite the sacrifice to love that it appears to be, University of Leeds researchers have discovered.

Space: The final frontier... open to the public

42 minutes ago

Historically, spaceflight has been reserved for the very healthy. Astronauts are selected for their ability to meet the highest physical and psychological standards to prepare them for any unknown challenges. However, with ...

NASA releases IRIS footage of X-class flare (w/ Video)

43 minutes ago

On Sept. 10, 2014, NASA's newest solar observatory, the Interface Region Imaging Spectrograph, or IRIS, mission joined other telescopes to witness an X-class flare – an example of one of the strongest solar flares—on ...

NASA sees Odile soaking Mexico and southwestern US

47 minutes ago

Tropical Storm Odile continues to spread moisture and generate strong thunderstorms with heavy rainfall over northern Mexico's mainland and the Baja California as well as the southwestern U.S. NASA's Tropical ...

Recommended for you

History books spark latest Texas classroom battle

Sep 16, 2014

As Texas mulls new history textbooks for its 5-plus million public school students, some academics are decrying lessons they say exaggerate the influence of Christian values on America's Founding Fathers.

Flatow, 'Science Friday' settle claims over grant

Sep 16, 2014

Federal prosecutors say radio host Ira Flatow and his "Science Friday" show that airs on many National Public Radio stations have settled civil claims that they misused money from a nearly $1 million federal ...

User comments : 0