Dark Side of Social Capital Social Preferences and Corruption

Jellal, Mohamed (2009): Dark Side of Social Capital Social Preferences and Corruption.

Abstract

Using the principal-agent- supervisor paradigm, this paper examines the occurrence of collusion in a setting where the principal has no information about the supervisor and the agent does not necessarily know the supervisor’s preferences. We formally prove the occurrence of collusion is more likely when the agent has information about the supervisor. This result suggests that corruption, which is likely to emerge in long term reciprocal relationships between public officials and potential bribery, may be reduced by the means of staff rotation. Evidence from an experimental study supports this proposition

• Item Type: MPRA Paper
• Language: English
• Keywords: Principal Agent Supervisor paradigm; Social Capital ;Social Preferences;Bureaucracy;Corruption , Staff Rotation
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design

References

Abbink K.,(1999), “ Staff rotation: A powerful weapon against corruption” mimeo

Abbink K., Irlenbusch B,.Renner E., (1999),“ An experimental bribery game “ mimeo

Andwig J.C., Moene K.O.,( 1990) ,“How corruption may corrupt ”,Journal of Economic Behavior and Organization, vol. 13, pp.63-76.

Bac M.,(1996), “ Corruption ,supervision ans the structure of hierarchies ”,Journal of Law and Economic Organization, vol.12,pp.277-298.

Bardhan P.,( 1997), “ Corruption and development : A review of issues ”,Journal of Economic Literature, vol.35, pp.1320-1346.

Besley T.,McLaren J., (1993), “Taxes and Bribery: The role of wage incentives”,Economic Journal, vol. 103, pp.119-141.

Block M.K.,Heineke J.M.,(1975),“ A labor theoretic analysis of criminal choice”,

Gosgel M.M., Miceli T.J.,( 2001),“ Job rotation: Costs , benefits, and stylized facts”, mimeo

Croson R.T.,(1996), “ Partners and Strangers revisited ”, Economics Letters,vol .53, pp.25-32.

Keser C., Van Winden F.,(2000), “ Partners contribute more to public goods than strangers:Conditional cooperation ”, Scandinavian Journal of Economics, vol.102,pp.23-39.

Kofman F., Lawarée J.,( 1993), “ Collusion in hierarchical agency ”,Econometrica, vol.61,pp.629-656.

Laffont J.J.,(1990) , “ Analysis of hidden gaming in a three level hierarchy ”,Journal of Law and Economic Organization, vol.6, pp.301-324.

Laffont J.J.,Tirole J.,( 1993), A Theory of incentive in procurement and regulation,Cambridge, MIT Press.

Mookherjee D.,Png I.,(1995),“ Corruptible law enforcers: How should they be compensated? ”, Economic Journal, vol.105,pp.145-159.

Qizilbash M., (1994), “Corruption ,temptation and guilt: Moral character in economic theory”, mimeo

Shleifer A.,Vishny R.W.,(1993), “Corruption”, Quarterly Journal of Economics, vol.108, pp.599-617.

Strausz R.,(1997), “Collusion and renegotiation in a principal-supervisor-agent relationship” candinavian Journal of Economics, vol.99, pp.497-518.

Tirole J.,(1986), “ Hierarchies and bureaucracies: On the role of collusion in organizations” Journal of Law and Economic Organization, vol.2, pp.181-214.

Tirole J., (1992), “Collusion and the theory of organizations”, in J.J Laffont, ed., Advances in economic Theory. Proceeding of the 6th world congress of the Econometric Society, Cambridge University Press, Cambridge, vol.2,pp.151-206