Economics
Fabio Méndez
Combating Corruption with Bargaining Disruption
Volume 165 (2009) / Issue 3, pp. 438-453 (16)
This paper presents a theoretical model in which governments regulate economic activity and individuals bypass the regulations by paying bribes to the public officials who monitor their businesses; the amount of the bribe is the subject of bargaining. The paper then introduces a policy that disrupts the bribe-bargaining process by rewarding public officials beyond what they would expect to receive if they accepted a bribe. This policy is referred to as bargaining disruption. The results of the model suggest that such policies can effectively combat corruption.