Wednesday, September 3, 2008

Simple corruption model in public services market

Here is a graph that captures the responses of a market in public/civic services to the appointment of officers who are
a) stricter
b) more corrupt

The extent of increase in the rent depend on the relative strictness or otherwise of officials. A more corrupt officer, by making himself more accessible, lowering the rents himself, and reducing the costs of being corrupt for everyone else, ends up lowering the aggregate rent in the market. In contrast, a stricter officer increases the risks involved and the costs of indulging in corruption, thereby driving up rents.

This has been discussed in earlier posts here and here.

1 comment:

Anniyan said...

Please see this report in pdf file, hope you appreciate this.