On Corruption and Countervailing Actions in Three South Asian Nations

We argue that readily available data and information in newspaper stories enable one to discern the nature and patterns of corruption and to understand actions taken to combat corruption. We analyze and compare numerous newspaper reports of corruption in India, Sri Lanka, and Bangladesh. Using analysis derived from existing theory of corruption, we demonstrate how information in news accounts improves our understanding of corruption. Bangladesh had more coercive corruption, with countervailing actions dominated by direct actions of victims. In India and Sri Lanka, corruption was generally collusive, with countervailing actions on behalf of victims frequently leading to legal actions and investigative reports.     

Swiss watch cycles: Evidence of corruption during leadership transition in China

This paper presents evidence of corruption during China's leadership transitions when governmental positions are open for competition. The import value of luxury watches, a popular medium for corrupt exchanges, peaked during regular leadership transitions in 1996–97, 2001–02, and 2006–07. However, imports of nonluxury watches and other luxury items unpopular for corrupt exchanges did not exhibit the same cycle. Nor did imports of luxury watches increase in Hong Kong, Singapore, or the US. During the leadership transition of 2011–12, since wearing a conspicuous luxury watch was by then likely to be exposed on social media and trigger an anti-corruption investigation, this “Swiss watch cycle” vanished.     

地方官员行为与经济发展:一个分析框架

本文在对地方官员行为的相关文献进行分析的基础上将影响官员行为的多个方面,即财政分权、政治晋升和腐败,构建了一个统一的分析框架。利用这一分析框架,我们考察了不同因素对官员行为(主要是努力和腐败)的影响,并得到了相关命题。与那些只研究一方面因素对地方官员行为影响的文献相比,利用我们的框架得到的结论更加全面。     

Former Communist party membership and bribery in the post-socialist countries

We study the effect of former Communist party membership on paying bribes to public officials and motivations for bribery, 25 years after the fall of communist rule. Data come from a large representative survey, conducted in post-socialist countries in 2015/16. To deal with endogeneity, we instrument party membership with information on whether family members were affected by the Second World War. Instrumental variable results suggest that links to the former Communist party increase the likelihood of paying bribes today; this result applies to the former party members as well as their children and relatives. Among bribe payers, people with the party links are more likely to offer bribes as well as think that bribe payments are expected. Overall, our findings suggest that the proclivity to corruption of the former Communist party members has been transmitted through family and thus sustained over time, contributing to corruption decades after the demise of the Socialist bloc.     

How does petty corruption affect tax morale in Sub-Saharan Africa?

Revenues from taxation gain in importance to finance economic development in Sub-Saharan Africa. One obstacle to enhancing the willingness to remit taxes can be the extortion of bribes by public officials. Using micro-level data from the Afrobarometer, we show that petty corruption erodes tax morale. The effect on tax morale is more severe in countries and regions where fewer people are affected by petty corruption and becomes insignificant if extortion of bribes is particularly prevalent. Differing levels of civic participation and potential access to tax funded services are also found to induce heterogeneous reactions to corruption experience. Applying a mediation analysis, we demonstrate that petty corruption not only has a direct effect on tax morale but also diminishes confidence in tax authorities and therefore affects tax morale indirectly. The harmful effects of corruption experience, however, operate mainly through a generally lowered inclination to uphold high levels of tax morale.     

Size approval voting

We propose a new class of voting procedures, called Size Approval Voting, according to which, the effective weight of a vote from a given individual depends on how many other candidates that individual votes for. In particular, weights are assumed to be non-negative and weakly decreasing in the number of approved candidates. Then, for a given profile of individual votes, all candidates with the maximal sum of weighted votes are elected. We show in our axiomatic analysis that the family of all Size Approval Voting procedures is characterized by a set of natural properties.     

Country governance,corruption, and the likelihood of firms’ innovation

Using a sample of firms from the World Bank Enterprise Survey for the period 2006–2016 in emerging and developing countries, we find that corruption has a negative impact on the likelihood of innovations, thus supporting the “sanding-the-wheels” hypothesis. Our empirical results also show that corruption at the firm level, in the manufacturing industry, and in regions with the worst governance or that are more corrupt has a significant negative effect on innovation. In addition, country governance plays a particularly important role in innovative activity for corrupt firms. The policy implication is that the government or authority should strengthen the positive role of government effectiveness, rule of law, regulatory quality, and control of corruption in order to improve firms’ innovation within an environment of corruption.     

Strategic analysis of petty corruption: Entrepreneurs and bureaucrats

This paper develops a game-theoretic model of “petty corruption” by government officials. Such corruption is widespread, especially (but not only) in developing and transition economies. The model goes beyond the previously published studies in the way it describes the structure of bureaucratic “tracks,” and the information among the participants. Entrepreneurs apply, in sequence, to a “track” of two or more bureaucrats in a prescribed order for approval of their projects. Our first result establishes that in a one-shot situation no project ever gets approved. This result leads us to consider a repeated interaction setting. In that context we characterize in more detail the trigger-strategy equilibria that minimize the social loss due to the system of bribes, and those that maximize the expected total bribe income of the bureaucrats. The results are used to shed some light on two much advocated anti-corruption policies: the single window policy and rotation of bureaucrats.     

Business cycle and corruption

In studying the Great Depression, Galbraith asserts that the higher the transitory income the higher the corruption. For a panel of 39 countries over 13 years, 1995-2007, Galbraith's claim holds. Regression analyses also confirm that the higher the permanent income, the lower the corruption.