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Causes and Consequences of Corruption: Theoretical Models and Empirical Evidence
Causes and Consequences of Corruption: Theoretical Models and Empirical Evidence
Abstract Submissions Closed
Wednesday, 24 February 2021: 09:00-10:30
Location:
RC45 Rational Choice (host committee)
Language: English
Session Type: Oral
Corruption arises from weak political and economic institutions that let agents in authoritarian positions exploit their discretionary power to extract or create rents. Economists view corruption as a mechanism that promotes allocative efficiency. It is a matter of debate whether corruption is indeed a mechanism that corrects market failure. In this debate, the enforceability of corrupt contracts has received too little attention. For example, it should not be taken for granted that a bribee has no incentive to abstain from providing the service he has been paid for by the briber. At the same time, a briber could opt for denunciating the bribee, even if the later has provided the service. The question that arises then is, how the parties to a corrupt interaction are able to overcome their dilemma when, for obvious reasons, legal enforcement of contracts is not possible. The aim of this session is to bring together researchers who study mechanisms of private enforcement of contracts in the context of corruption, both theoretically and empirically, and derive implications for legal monitoring and punishment to control corruption.
Session Organizer: