Bennett, J. and Rablen, M.D. orcid.org/0000-0002-3521-096X (2021) Bribery, hold-up, and bureaucratic structure. Economic Inquiry, 59 (3). pp. 880-903. ISSN 0095-2583
Abstract
We consider infrastructure provision by a foreign investor when the domestic bureaucracy is corrupt, but also cares for domestic welfare. Bureaucrats bargain with the investor over price and (potentially) bribes, both before the investment is sunk and afterwards, using the threat of expropriation. We show that domestic welfare may be greater in equilibria with bribery than in equilibria without. We specify conditions under which changes in the degree of bureaucratic centralization or of bureaucratic care have a positive, negative, or nonmonotonic effect on domestic welfare. The impact of centralization on domestic welfare is mediated through the level of bureaucratic care.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International. This is an open access article under the terms of the Creative Commons Attribution License, (http://creativecommons.org/licenses/by/4.0/) which permits use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | bribery; corruption; hold-up; renegotiation; bureaucratic structure; centralized bureaucracy; decentralized bureaucracy |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 15 Feb 2021 14:04 |
Last Modified: | 28 May 2021 09:07 |
Status: | Published |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | 10.1111/ecin.12985 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:170826 |