Analyzing law enforcement data on corruption incidents for a panel of 79 Russian regions for the period 2004-2007, we find that the relative salaries of bureaucrats determine corruption levels: Corruption declines as relative salaries rise up to a turning point, beyond which corruption rises...

Can historical institutions affect today's firm innovation? We analyze a historical experiment in 1902, when the foreign-run Chinese Maritime Customs Service (CMC), known for its efficient and transparent governance, took over some of the notoriously corrupt Chinese Native Custom stations and...

This paper reports on an experiment of corruption that was conducted in two treatments: one with the possibility of detection and one without. It turns out that monitoring reduces corruption through deterrence; at the same time, it destroys the intrinsic motivation for honesty. Thus the net effect...

This paper argues that corruption in Russia is systemic in nature. Low wage levels of public officials provide strong incentives to engage in corruption. As corruption is illegal, corrupt officials can be exposed any time, which enforces loyalty towards the powers that be; thus corruption is a...