Poor governance can affect greatly public service delivery, both directly through higher price, and indirectly through lower quality or quantity available. When seeking a public service, users may be required to pay in bribes significantly more than the official price. Consequently, some users...

This paper analyzes the pervasiveness and persistence of rent seeking, misgovernance, and public sector inefficiency in many developing and transition economies. We formalize evidence from country experiences and empirical studies into a stylized analytical framework that reflects realistic...

When a customer can borrow from several competing banks, multiple lending raises default risk. If creditor rights are poorly protected, this contractual externality can generate novel equilibria with strategic default and rationing, in addition to equilibria with excessive lending or...

We investigate whether corruption “greases the wheels” of bureaucracies and enhances economic performance. Specifically, we examine the interaction effect of corruption and regulation on the economic performance of manufacturing industries in India. Our estimation results show that the...

We experimentally investigate the extent to which social observability of one’s actions and the possibility of social non-monetary judgment affect the decision to engage in rule breaking behavior. We consider three rule breaking scenarios — theft, bribery and embezzlement — in the absence...

Police corruption is widespread and may be important in explaining the high risk of road fatalities in Sub-Saharan Africa. This study examines the impact of this phenomenon on road safety in Sub-Saharan Africa. A theoretical model is presented where a representative carrier faces corruptible...

We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different...

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...

This paper investigates if and how illegal disposal of waste is affected by the decentralized waste management commitment of local governments and by enforcement policies. On the basis of a panel dataset at the Italian provincial level that originally integrates waste, economic, policy and...

This analysis investigates a political corruption model that builds on previous literature on corruption in hierarchies. Our study enriches the literature on political corruption emphasizing the contrasting role of the minorities having a control role of the majorities. In particular, this paper...