Corruption, inequality and fairness
By: [by] Alberto Alesina [and] George-Marios Angeletos
Contributors: Angeletos, Marios; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 05-16; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 05-16.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Number of pages: 24
Description: Bigger governments raise the possibilities for corruption; more corruption may in turn raise the support for redistributive policies that intend to correct the inequality and injustice generated by corruption. We formalize these insights in a simple dynamic model. A positive feedback from past to current levels of taxation and corruption arises either when wealth originating in corruption and rent seeking is considered unfair, or when the ability to engage in corruption is unevenly distributed in the population. This feedback introduces persistence in the size of the government and the levels of corruption and inequality. Multiple steady states exist in some cases. Keywords: Corruption, rent seeking, inequality, fairness, redistribution, political economy. JEL Classifications: D31, E62, H2, P16.
Notes: "April 29, 2005"--t.p. -- "First draft: September 2004, this version: April 2005"--Abstract, p. 1.

Includes bibliographical references (p. 22-24).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.