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      • Department of Economics
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      Corruption and supervision costs in hierarchies

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      Author(s)
      Bac, M.
      Date
      1996
      Source Title
      Journal of Comparative Economics
      Print ISSN
      0147-5967
      Electronic ISSN
      1095-7227
      Publisher
      Academic Press
      Volume
      22
      Issue
      2
      Pages
      99 - 118
      Language
      English
      Type
      Article
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      Abstract
      This article studies the relation between the structure of monitoring hierarchies and corruption, that is, the expected number of bribed members. The model allows for internal corruption, a form of collusion eliminating accountability (monitoring) in the hierarchy. It is shown that the number of subordinates in a corruption-minimizing hierarchy is constrained by the prospect or internal corruption and/or monitoring costs. This constraint may generate structurally independent segments. When its members are provided with the same incentive system, the middle rank of a supervision chain displays the lowest external corruption, but there is more scope for internal corruption in the upper part than in the lower part.
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      http://hdl.handle.net/11693/10842
      Published Version (Please cite this version)
      http://dx.doi.org/10.1006/jcec.1996.0013
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      • Department of Economics 667
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