history dependence in concave economies abstract this paper investigates concave intertemporal optimization problems and derives two mechanisms either growth or control state interactions e g due to endogenous preferences that allow for multiple steady states including an unstable one therefore history dependence is possible in a perfectly governed economy subject to the law of diminishing returns if one of these two mechanisms is present this result complements a large amount of literature that attributes history dependence to convexities as a consequence lock ins into undesired evolutions are possible beyond the familiar case of increasing returns

equipment investment and growth in developing countries abstract differences in equipment investment or equipment prices account for large variations in growth rates across countries an important task is to understand the economic mechanism underlying the equipment growth nexus and its policy implications in order to study this issue this paper develops a model in which growth is driven by the adoption of technologies that are embodied in equipment i show that this model can quantitatively account for the observed cross country relationships between equipment investment equipment prices and growth i find that the competitive equilibrium is characterized by inefficiently low levels of learning and too slow growth and study which policies are able to remedy this inefficiency

is the efficiency wage efficient the social norm and organizational corruption the effectiveness of efficiency wage incentives is often jeopardized by perverse organizational corruption we model organizational corruption as a phenomenon of social interaction and relate the substantial psychological role characterizing the social norm to the corruption problem we find that if the status quo bribery rate within the firm is high social norms can no longer serve as a sufficient sanction against a corrupt supervisor pandemic organizational corruption tends to generate a critical mass effect the snowball effect which intensifies the corruption effect this intensified effect due to the snowballing character of social norms may more than offset the usual incentive effect of wages resulting in more widespread shirking in the firm jel classification d82 j41

corruption norm violation and decay in social capital the paper studies the link between corruption and social capital measured as trust using data from a lab experiment subjects play either a harassment bribery game or a strategically identical but differently framed ultimatum game followed by a trust game in a second experiment we elicit social appropriateness norm of actions in the bribery game and ultimatum game treatments our experimental design allows us to examine whether subjects who have been asked to pay a bribe are less likely to trust than those in an isomorphic role in the ultimatum game we also uncover the underlying mechanism behind any such behavioral spillover results suggest that a there is a negative spillover effect of corruption on trust and the effect increases with decrease in social appropriateness norm of the bribe demand b lower trust in the bribery game treatment is explained by lower expected return on trust c surprisingly for both the bribery and ultimatum game treatments social appropriateness norm violation engenders the decay in trust through its adverse effect on belief about trustworthiness

the impact of social mobility and within family learning on voter preferences evidence from a sample of twins abstract income maximizing consumers should vote in predictable ways support for liberal redistributive governments should fall as income rises but weak empirical evidence for these voting patterns might suggest that voters are influenced by alternative factors such as perceptions of social mobility from within family learning to examine these effects this paper uses a data set of twins and a recently developed econometric approach to show that within family learning and family specific effects are important determinants of voting preferences and preferences for redistribution

general economic conditions and national elections the fact that economic conditions influence voters is a leading commonplace of conversation in election years the question is is this fact in fact a fact despite the overwhelming popularity of the fact it has received neither an explicit theoretical analysis presumably because it is so obvious that economic adversity should create political adversaries nor until recently a satisfactory statistical analysis gerald h kramer has presented a multivariate analysis of congressional elections which would strongly suggest that fluctuations in the rate of unemployment have no appreciable effect upon elections but that fluctuations in per capita real income are influential in the following pages i propose to 1 reaffirm his finding on the electoral unimportance of ordinary fluctuations in unemployment 2 argue that contrary to kramer fluctuations in real income also do not have important electoral effects and 3 present an argument based upon rational voter behavior for the unimportance of general economic conditions in national elections

a comparison of bribery and bidding in thin markets abstract this paper compares bribery to competitive bidding in a government purchasing context while competitive bidding is one method of procurement bribery is a common alternative in many third world countries although bribery is often considered to be the ethical antithesis of competitive bidding the analysis shows there is a fundamental isomorphism between bribery and competitive bidding on the supply side of the transaction

unemployment and the democratic electoral advantage this article calls into question the conventional wisdom that incumbent parties are rewarded when unemployment is low and punished when it is high using county level data on unemployment and election returns for 175 midterm gubernatorial elections and 4 presidential elections from 1994 to 2010 the analysis finds that unemployment and the democratic vote for president and governor move together other things being equal higher unemployment increases the vote shares of democratic candidates the effect is greatest when republicans are the incumbent party but democrats benefit from unemployment even when they are in control the explanation for these findings is that unemployment is a partisan issue for voters not a valence issue and that the democratic party owns unemployment when unemployment is high or rising democratic candidates can successfully convince voters that they are the party best able to solve the problem

an equilibrium queuing model of bribery it is sometimes argued that bribery is inefficient because bureaucrats may cause delays for attracting more bribes this hypothesis is examined in the context of a queue where customers having different values of time are ranked by their bribe payments to the queue s server the nash equilibrium strategies of the customers are derived it is shown that the server is unlikely to slow down the allocation process when bribery is allowed the model does not have stringent informational requirements and the equilibrium outcome minimizes the average value of time costs of the queue it also suggests a useful auctioning procedure

bread and peace voting in u s presidential elections a simple bread and peace model shows that aggregate votes forpresident in postwar elections were determined entirely byweighted average growth of real disposable personal income percapita during the incumbent party s term and the cumulativenumbers of american military personnel killed in action as aresult of u s intervention in the korean and vietnamese civilwars the model is subjected to robustness tests against twenty two variations in functional form inspired by the extensiveliterature on presidential voting not one of these variationsadds value to the bread and peace model or significantly perturbsits coefficients

informal self employment and macroeconomic fluctuations article i nfo article history informal self employment is a major source of employment in developing countries its cyclical behavior is important to our understanding of the functioning of ldc labor markets but turns out to be surprisingly complex we develop a flexible model with two sectors a formal salaried tradable sector that may be affected by wage rigidities and an informal non tradable self employment sector faced with liquidity constraints to entry this labor market is then embedded in a standard small economy macro model we show that different types of shocks interact with different institutional contexts to produce distinct patterns of comovement between key variables of the model relative salaried self employed incomes relative salaried self employed sector sizes and the real exchange rate model predictions are then tested empirically for argentina brazil colombia and mexico we confirm episodes where the expansion of informal self employment is consistent with the traditional segmentation views of informality however we also identify episodes where informal self employment behaves pro cyclically here informality is driven by relative demand or productivity shocks to the non tradable sector

economic growth with endogenous corruption an empirical study the effect of corruption on the rate of economic growth for a panel of countries during 1984 2007 is investigated using recent improvements in dynamic panel data techniques to control for the endogeneity of corruption and investment corruption has a significant effect on the growth rate of real per capita income this effect is non linear

the incidence and persistence of corruption in economic development abstract economic development and bureaucratic corruption are determined jointly in a dynamic general equilibrium model of growth bribery and tax evasion corruption arises from the incentives of public and private agents to conspire in the concealment of information from the government these incentives depend on aggregate economic activity which in turn depends on the incidence of corruption the model produces multiple development regimes transition between which may or may not occur in accordance with recent empirical evidence the relationship between corruption and development is predicted to be negative

privatization and the british electorate microeconomic policies macroeconomic evaluations and party support despite much scholarly research on the link between macroeconomic evaluations and political behavior relatively little is known about the influence of government economic policy on this process margaret thatcher s recent sales of public assets privatization in britain provide a unique opportunity to examine the link between microeconomic activity measured by privatization macroeconomic evaluations and voting by applying multivariate analysis to data collected during the 1983 and 1987 general elections we show that privatization measured by share purchases and council house ownership stimulates positive judgments about the country s economy however the effect of privatization on the vote is almost entirely indirect via these retrospective judgments about the economy while privatization has undoubtedly benefited the conservatives electorally the evidence on council house purchases suggests that the impact may be temporary

organized crime corruption and punishment we analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment when bribing costs are low that is badly paid and dishonest law enforcers work in a weak governance environment and the rents from criminal activity are sufficiently high we find that increasing policing and sanctions can generate higher crime rates indeed beyond a threshold further increases in intended expected punishment create incentives for organized crime to extend corruption rings and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime

bureaucratic delays and bribe taking abstract bureaucrats in ldcs are known to often elicit bribes by delaying the processing of documents applications submitted by private agents this paper models this practice and discusses two procedures to control the consequent social welfare loss we show that compared to the situation with no sanctions on bribe taking imperfect vigilance coupled with penalties for bribe taking leads to more frequent delays and a pareto inferior solution a superior governance mechanism involves a reward penalty scheme based upon the average time taken to clear applications an efficiency wage may have to be paid to implement this solution

the impact of corruption on entry strategy evidence from telecommunication projects in emerging economies with globalization and the growth in emerging economies multinational enterprises mnes now frequently confront challenges associated with corrupt governments already a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance we move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices building on institutional theory we predict that mnes will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry using data on 220 telecommunications development projects in 64 emerging economies we find that firms adapt to the pressures of corruption via short term contracting and entry into joint ventures we also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions in addition to the overall level of corruption in contrast to extant research we show that mnes use nonequity entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption

notes on bribery and the control of corruption abstract existing models of corruption that allow for bribery have ignored an important recursive problem when an auditor or a policeman bargains over a bribe with a person he has arrested he has to take into account the fact that he may in turn be caught for taking this bribe and be involved in a similar bargain but from the other side the purpose of this paper is to provide a simple model for capturing this recursion having done so it goes on to analyse some conditions for the control of corruption these turn out to be different from what conventional wisdom suggests

economics of public good provision auditing outsourcing and bribery this study investigates a government s contracting decision to audit or outsource the provision of a public good given a potential hidden bribe and information asymmetries the key findings are the following first the bribe and price of the public good are increasing in the corruptibility of the department second the bribe is decreasing in the firm s bargaining power third a bribery equilibrium exists when the department s corruptibility is sufficiently high given the firm s bargaining power a bribe involves extortion or a compensatory payment depending on the department s corruptibility only a compensatory bribe affects the department s contracting decision ce memoire examine une decision contractuelle d un gouvernement de produire un bien public lui meme et de faire une verification ou d aller en sous traitance pour la fourniture d un bien public compte tenu de la possibilite de pot de vin cache et d asymetries informationnelles les principaux resultats s enoncent comme suit d abord le pot de vin et le prix du bien public s accroissent avec le degre de corruptibilite du ministere ensuite la taille du pot de vin decline a proportion que le pouvoir de marchandage de la firme s accroit enfin un equilibre de corruption existe quand la corruptibilite du ministere est suffisamment elevee compte tenu du pouvoir de marchandage de la firme un pot de vin implique une extorsion ou un paiement compensatoire selon la corruptibilite du ministere seul un paiement compensatoire affecte la decision contractuelle du ministere

a note on competitive bribery games abstract within a competitive bribery game in which each player has incomplete information we show that there exists a unique nash equilibrium which is symmetric similar results hold for another bribery game form that prevails in the literature implications for corrupt practices in relation to economic development are also discussed

national culture and corporate debt maturity abstract we investigate the influence of national culture on corporate debt maturity choice based on the framework of williamson we argue that culture located in social embeddedness level can shape contracting environments by serving as an informal constraint that affects human actors incentives and choices in market exchange we therefore expect national culture to be related to debt maturity structure after controlling for legal political financial and economic institutions using hofstede s four cultural dimensions uncertainty avoidance collectivism power distance and masculinity as proxies for culture and using a sample of 114 723 firm years from 40 countries over the 1991 2006 period we find robust evidence that firms located in countries with high uncertainty avoidance high collectivism high power distance and high masculinity tend to use more short term debt we interpret our results as consistent with the view that national culture helps explain cross country variations in the maturity structure of corporate debt

an efficiency and welfare classification of rationing by waiting in the presence of bribery abstract governments often allocate commodities at low prices and on a first come first served basis rationing by waiting while bureaucrats who distribute the commodities usually take bribes a model is developed to classify the efficiency implications of bribery and socially optimal pricing schemes in rationing by waiting if the rationed good and individual income spent on other goods other income are complements then bribery may enhance allocative efficiency and a dual pricing scheme can augment social welfare however if the rationed commodity and other income are substitutes then bribery may not improve allocative efficiency and distributing the rationed commodity free is socially optimal

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

corruption and development a review of issues in this paper we start with a discussion of some of the different denotations of the problem of corruption we then consider the ways in which the damaging consequences of corruption operate in a developing economy while not ignoring its possible redeeming features in some cases we pursue the question of why corruption is perceptibly so different in different societies and also persistent finally we examine the feasible policy issues that arise in this context

does terrorism work this paper examines whether terrorism is an effective tool for achieving political goals by exploiting geographic variation in terror attacks in israel from 1988 to 2006 we show that local terror attacks cause israelis to be more willing to grant territorial concessions to the palestinians these effects are stronger for demographic groups that are traditionally right wing in their political views however terror attacks beyond a certain threshold cause israelis to adopt a less accommodating position in addition terror induces israelis to vote increasingly for right wing parties as the right wing parties move to the left in response to terror hence terrorism appears to be an effective strategy in terms of shifting the entire political landscape to the left although we do not assess whether it is more effective than non violent means

modelling the informal sector formally abstract the theoretical characterization of formal informal sector dualism by labor market dualism is integrated with its empirical characterization by size dualism by supposing that the minimum formal sector wage is only enforced for firms greater than a certain size a firm s size varies directly with the talent of its enterpreneur manager and the choice between formal and informal sector entrepreneurship is determined endogenously it is then shown that the size gap between the smallest formal sector firm and largest informal sector firm varies directly with the formal informal sector wage differential which in turn is shown as expected to increase the further is the minimum wage above the market clearing wage the comparative statics of changes in the size of the firm above which the minimum wage is enforced are also examined

on controlling crime with corrupt officials abstract this paper attempts to synthesize the recently developed strategic approach towards modeling corruption and the classical views the following propositions are sought to be proved a if reward schemes are introduced the classical and the strategic approaches yield similar results so far as controlling crime is concerned b with probability of detection being dependent on the effort of a corrupt official crime cannot be controlled and c in the context of an infinitely repeated game of crime the corrupt law enforcing agent might choose less bribes and lower effort level than the myopic optimal and hence would strategically pamper crime

informal sector the credit market channel abstract we build a model of firms choice between formality and informality complying with costly registration procedures allows the firms to benefit from key public goods enforcement of property rights and contracts that make the participation in the formal credit market possible in a moral hazard framework with credit rationing their decision is shaped by the interaction between the cost of entry into formality and the relative efficiency of formal versus informal credit mechanisms and their related institutional arrangements the model is consistent with existing stylized facts on the determinants of informality

estimating the performance effects of business groups in emerging markets business groups confederations of legally independent firms are ubiquitous in emerging economies yet very little is known about their effects on the performance of affiliated firms we conceive of business groups as responses to market failures and high transaction costs in doing so we develop hypotheses about the effects of group affiliation on firm profitability affiliation could either boost or depress firm profitability and members of a group are likely to earn rates of return similar to other members of the same group using a unique data set compiled largely from local sources we test for these effects in 14 emerging markets argentina brazil chile india indonesia israel mexico peru the philippines south africa south korea taiwan thailand and turkey we find evidence that business groups indeed affect the broad patterns of economic performance in 12 of the markets we examine group affiliation appears to have as profound an effect on profitability as does industry membership yet strategy scholars have a much clearer grasp of industries than of groups moreover membership in a group raises the profitability of the average group member in several of the markets we examine this runs contrary to the wisdom conventional in advanced economies that unrelated diversification depresses profitability overall our findings suggest that the roots of sustained differences in profitability may vary across institutional contexts conclusions drawn in one context may well not apply to another copyright 2001 john wiley sons ltd

corruption as a gamble abstract in the following model of corruption a simple game is set up whose players are a government official granting a permit conditional on a test and a candidate requesting the permit the game is solved under different assumptions as to the information sets of the players perfect information asymmetric information and imperfect information on both sides in the latter case after characterizing the solution and presenting some important comparative statics results the paper moves on to show the emergence of multiple equilibria in corruption illustrating the interaction of corruption at different hierarchical levels of an administration

the empirical measurement of rent seeking costs this survey focuses on the efforts carried out mainly by public choice scholars to measure the social cost of rent seeking the concept introduced by gordon tullock in 1967 and coined by anne krueger in 1974 is well known and accepted by the profession but its empirical measurement has fallen behind with respect to its theoretical formulation an often criticized lack in the literature although there are good general surveys none has specifically focused on reviewing the empirical efforts made to measure the phenomenon the purpose of this paper is to provide such a survey it could be said that the rent seeking concept has been fully integrated into economic jargon it is commonly used when some agent seeks to obtain an artificial transfer usually from government and covers all the actions efforts or expenses that the agent has to carry out to obtain the prize the key issue however is the possible social waste that arises in these situations the empirical efforts to measure such waste constitute the main purpose of this survey the concept of rent seeking was introduced by tullock 1967 although the term was first coined by krueger 1974 in a paper not related to the former in a recent paper tullock himself wrote of the history of the concept and the intellectual context within which it arose tullock 2003 starting with the pioneering work by harberger 1954 several studies were conducted during the 1950s in which the calculation of the social cost of monopolies and tariffs always gave the result of very modest figures the first response to these results was made by leibenstein 1966 and his x efficiency which refers to a hypothetical loss in efficiency due to the absence of competition shortly after leibenstein s paper appeared tullock argued that the deadweight costs of monopoly and tariffs understate the true social cost because the expenditures made to capture related rents have to be included so rectangles as well as harberger s triangles have to be included in the calculations let us see this argument once more figure 1 depicts the iconic tullock graphic analysis of rent seeking it represents the demand schedule d for a monopolized good where pm is the monopoly

religiosity and state welfare abstract the catholic sex abuse scandals reduced both membership and religiosity in the catholic church because government spending on welfare may substitute for the religious provision of social services we consider whether this plausibly exogenous decline in religiosity affected several measures of the public taste toward government and spending on welfare between 1990 and 2008 in places where there were more scandals individuals state a preference for less government provision of social services in contrast a higher level of abuse is also associated with an increase in voting for democratic candidates for president state legislatures and the us house of representatives and an increase in per capita government welfare spending although this increase is insufficient to replace the decrease in catholic provided charity

policy oriented voting in response to economic issues this study explores the hypothesis that voting in response to economic problems is policy oriented voters concerned about unemployment ore predicted to give greater support to democratic candidates while those concerned about inflation are predicted to vote more republican in light of evidence from previous research this study investigates the electoral effects of inflation and unemployment as 1 problems directly experienced by the individual and 2 problems deemed serious for the nation as a whole support is strongest for the unemployment side of the hypothesis voters personally affected by unemployment gave a modest boost to democratic candidates in virtually every election and in years of high unemployment the large percentage of voters who fell it was a serious national problem voted heavily democratic as well this study concludes by discussing the important implications these findings have for our understanding of how economic conditions influence voting behavior in american national elections

the unemployment rate consequences of partisan monetary policies economists and political scientists have identified several ways in which political motivations and institutional arrangements can affect macroeconomic policymaking one way is described by the political business cycle model 42 37 in which vote seeking politicians manipulate the path of the economy to secure unsustainably favorable conditions at election times variants of this model have been widely tested with limited success a second channel for political impacts comes through partisan policy changes brought about by electoral turnover the pathbreaking work in this literature includes the contributions of hibbs 30 31 32 33 and beck 11 these works have focused on the empirical issue of how unemployment rates vary under democratic and republican presidents in the u s and have found strong support for the proposition that unemployment rates decline under democratic administrations a third phenomenon has been studied primarily by economists and concerns the credibility problem faced by a central bank selecting money growth rates models of the credibility problem 8 21 describe a setting in which the central bank and the public interact by respectively choosing actual and expected money growth rates in a variant of the prisoners dilemma this interaction can result in excessive inflation

how corruption may corrupt abstract the incidence of corruption appears to vary strongly across societies even for comparable activities the model highlights how the profitability of bureaucratic corruption may be related to its frequency and points toward a few mechanisms that can be used in explaining the stylized facts of varying incidence of corruption there might be multiple self fulfilling equilibria levels of corruption even when both supply and demand of corrupt acts are considered

a theory of misgovernance this paper tries to explain why government bureaucracies are often associated with red tape corruption and lack of incentives the paper identifies two specific ingredients that together can provide an explanation the fact that governments often act precisely in situations where markets fail and the presence of agency problems within the government we show that these problems are exacerbated at low levels of development and in bureaucracies dealing with poor people we also argue that we need to posit the existence of a welfare oriented constituency within the government in order to explain red tape and corruption

bipolar multicandidate elections with corruption the goals of democratic competition are not only to implement a majority s preference on policy questions but also to provide a deterrent against corrupt abuse of power by political leaders we consider a simple model of multicandidate elections in which different electoral systems can be compared according to these two criteria among a wide class of single winner scoring rules only approval voting is found to satisfy both effectiveness against corruption and majoritarianism for this model

institutional framework and economic development international evidence this paper examines the effect of quality of the institutional framework on economic development our empirical results support the hypothesis that good institutions improve efficiency and accelerate growth the positive effect of institutional quality is more pronounced with mutually reinforcing support of economic freedom our results also indicate that good institutions help developing countries grow faster to achieve conditional convergence we infer from the results that economic development requires not only physical and human capital formation but also freedom to choose and institutional support

partisan cycles in congressional elections and the macroeconomy in the postwar united states the president s party has always done worse in the midterm congressional elections than in the previous congressional election republican administrations exhibit below average and democratic administrations above average economic growth in the first half of each term whereas in the latter halves the two see equal growth our rational expectations model is consistent with these two regularities in presidential elections voters choose between two polarized candidates they then use midterm elections to counterbalance the president s policies by strengthening the opposition in congress since presidents of different parties are associated with different policies our model predicts a spurious correlation between the state of the economy and elections our predictions contrast with those of retrospective voting models in which voters reward the incumbent if the economy is doing well before the election our model performs empirically at least as well as and often better than alternative models

taxation wage controls and the informal sector abstract in this paper we study the effects of taxation and wage controls in a developing economy with an informal sector for that purpose we build a model with firm heterogeneity in which a formal and an informal sector endogenously emerge in some productive branches of the economy based on the assumption that the marginal cost of tax and regulation evasion increases with the size of the firm our model offers an explanation for the observed discontinuity in the distribution of firms size the missing middle three forms of dualism scale wage and evasion consistent with market segmentation are obtained the model accounts for the presence of waiting unemployment that seems particularly pervasive in urban regions a computable general equilibrium cge model for cameroon is built incorporating these features various reforms of the tax and regulation system are simulated and their effects on the extent of the informal sector are analyzed

costs of distrust the virtuous cycle of tax compliance in jordan tax compliance has been extensively researched yet the classic question why do people pay taxes remains unanswered in jordan tax evasion is widespread the state and citizens have been trapped in a continuous hide and seek game which has taken the form of a virtuous cycle this paper investigates tax evasion along with the most noticeable features of the jordanian tax system it also highlights how the virtuous cycle of tax evasion has been established and what could possibly be a way out of it we argue that sociocultural values are the most prominent cause for tax evasion that is the procedures of state formation and functionality in jordan have created mutual distrust between the state and its citizens having been raised in a community characterized by deep distrust tax evasion is no longer considered immoral by substantial numbers of the jordanian population we argue that successive governments need to create a high trust based culture and formulate strategies that serve to acquire normative ethical values in order to enhance voluntary compliance the way to accomplish this necessity is through enforcing the state s transparency and accountability the taxation system needs to concentrate on income tax rather than raise tax rates on essential commodities to collect substantial tax revenues thus further reform of the taxation system along with a reduction in tax incentives need to be considered moreover lowering the exceptionally high personal income tax threshold would bring jordan in line with its peers expand the base and introduce more progressivity there would also be a scope to introduce a minimum tax based on sales as a tool to address tax evasion

on the individual decisions to commit corruption a methodological complement this paper contributes to the analysis of corruption by complementing two different methodologies to determine the behavior of citizens who participate in corruption acts focusing in mexico a quantitative analysis combined with a survey and econometric techniques is used to determine sociodemographic and institutional factors affecting such behavior and complemented by focus groups collecting some knowledge on how informal institutions and norms could promote or block corrupt behavior it is shown that there is a trade off between perceptions social dynamics and individual incentives for corrupt behavior within an institutional framework creating a kind of vicious circle difficult to break up

lyapunov stability in an evolutionary game theory model of the labour market in this paper the existence and stability of equilibria in an evolutionary game theory model of the labor market is studied by using the lyapunov method the model display multiple equilibria and it is shown that the nash equilibria of the static game are evolutionary stable equilibria in the game theory evolutionary set up in this vein a complete characterization of the dynamics of an evolutionary model of the labor market is provided

corruption and the political economy of resource based development a comparison of asia and sub saharan africa we model how the supply and demand for bribes affects resource use by an economy and the reinvestment of resource rents in other assets this requires adjusting the world bank s measure adjusted net savings for any rent dissipation due to corruption the impacts of corruption on long run changes and periodic growth in the adjusted net savings rate are estimated across african and asian economies from 1970 to 2003 corruption rather than resource dependency per se affects negatively the ability of african countries to reinvest resource rents in the short term but for asian countries corruption is less important than point resources corruption influences long run growth in adjusted net savings rates in all countries and is also the pathway through which this growth is affected by patterns of resource use trade and abundance

economic and referendum voting a comparison of gubernatorial and senatorial elections we compare vote choice in senate and gubernatorial elections from 1986 and 1990 with two retrospective voting hypotheses the national referendum hypothesis and an economic retrospective hypothesis despite the similarities between the office of u s senator and governor same constituency high levels of campaign spending highly visible candidates etc we find that different types of retrospective evaluations are used with respect to vote choice as members of the national legislative branch senators fortunes are linked to the success or failures of the president in contrast governors as state executives are held accountable for perceived state economic conditions while senators escape unscathed from the same general economic evaluations these findings shed some light on the nature of vote choice in a political system complicated by federalism and separation of powers

how corruptible are you bribery under uncertainty abstract we model corruption in a society as a result of bargaining for bribes between private citizens and public officials we investigate the role that incomplete information with respect to the intrinsic moral cost of one s potential corruption partner plays out in his or her propensity to engage in bribery and consequently the equilibrium level of corruption in the society we assume that the cost of engaging in corruption is subject to strategic complementarities which may lead to multiple corruption equilibria we find that corruption is lowest when potential bribers and potential bribees are uncertain regarding each other s corruptibility and have asymmetric bargaining powers our uncertainty result provides theoretical support in favor of anti corruption strategies such as staff rotation in public offices aimed at decreasing the social closeness of bribers and bribees our bargaining power result suggests that under uncertainty monopolistic public good provision has the same corruption reducing effect as competitive public good provision

the market for public office why the indian state is not better at development abstract how and why officials are transferred from one post to another can in india does have far reaching consequences for the effectiveness of public service organizations such as irrigation agriculture forestry and soil conservation departments the transfer mechanism used in many departments of indian states involves a kind of internal labor market a truer market than in the way that term is often used by labor market economists it allows pressures for corrupt behavior to bear down on the incumbents of certain posts and itself amplifies those pressures frequently the pressures on officials to be corrupt cause them to behave in ways contrary to the ostensible objectives of their departments why is the indian state not better at promoting development to an important degree because of the corruption transfer mechanism and its effects on bureaucratic initiatives