American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Corruption Dynamics: The Golden Goose Effect
American Economic Journal: Economic Policy
vol. 5,
no. 4, November 2013
(pp. 230–69)
(Complimentary)
Abstract
Theoretical work on disciplining corrupt agents has emphasized the role of expected future rents -- for example, efficiency wages. Yet taken seriously this approach implies that illicit future rents should also deter corruption. We study this "golden goose" effect in the context of a statutory wage increase in India's employment guarantee scheme, comparing official microrecords to original household survey data to measure corruption. We estimate large golden goose effects that reduced the total impact of the wage increase on theft by roughly 64 percent. In short, rent expectations matter. (JEL D73, D82, H83, J41, K42, O17, O21)Citation
Niehaus, Paul, and Sandip Sukhtankar. 2013. "Corruption Dynamics: The Golden Goose Effect." American Economic Journal: Economic Policy, 5 (4): 230–69. DOI: 10.1257/pol.5.4.230Additional Materials
JEL Classification
- D73 Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D82 Asymmetric and Private Information; Mechanism Design
- H83 Public Administration; Public Sector Accounting and Audits
- J41 Labor Contracts
- K42 Illegal Behavior and the Enforcement of Law
- O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O21 Planning Models; Planning Policy
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