Investigating Corruption
Bibliographic Data
| ID | 19936162 |
|---|---|
| Authors | Canice Prendergast (The Econometric Society, corresponding author) |
| Year | 2000 |
| Publication date | 2000-12-01 |
| Open Access | No |
| Type | BOOK |
| Publisher | World Bank, Washington, DC (PUBLISHER) |
| DOI | 10.1596/1813-9450-2500 |
| OpenAlex | W4253165828 |
| Language | EN |
| Citations received | 1 |
| References cited | 7 |
Agency theory has had little to say \n about the control of bureaucratic corruption, perhaps the \n greatest agency problem that exists. The author considers \n the role of incentive contracting in reducing corruption \n through the use of independent investigations-a common way \n to monitor corruption. In simple settings, bureaucratic \n corruption can be suppressed by rewarding and penalizing \n bureaucrats, depending on the independent \n investigators' findings. But the author shows that \n incentive contracts can change behavior in both undesirable \n and beneficial ways. He analyzes three possible harmful \n behavioral responses to investigations. 1) Many \n investigations are (officially) instigated by customer \n complaints. Bureaucrats could become overinterested in \n "keeping the customer happy," even when it is not \n efficient to do so. 2) Bureaucrats often have private \n information on how cases should be handled, information that \n is hard for investigators to verify. The author shows that \n investigations can give bureaucrats excessive incentives to \n "do things by the book," offering decisions that \n are more likely to be consistent with the opinions of their \n superiors. 3) Bureaucrats sometimes collect bribes to \n "look the other way"-that is, ignore known \n transgressions. A solution to this problem might be to offer \n rewards for bringing cases to light, but a bureaucrat could \n then waste resources by generating "nuisance \n cases" simply to receive the bonus. In each of these \n cases, harmful responses to investigations and incentives \n may be costly enough that it would be more efficient simply \n to pay a flat wage and accept some corruption. In other \n words, incentive contracts may not work so well in reducing \n bureaucratic corruption, because of the variety of \n dysfunctional responses that investigations may elicit. It \n may be best to limit investigations to cases where the \n investigator can find direct evidence of wrongdoing (for \n example, cash being handed over, or bureaucrats living \n beyond their means)
Art · Business · Language change · Literature · Political science · Corruption and Economic Development
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,06 |
| Citation span | 2008 - 2008 (1) |
| Citation velocity | historical |
| Highly cited | No |