The aim of the article is to examine a briber initiated corrupt transaction and the role of intermediaries in such a transaction, using a game theoretical model. Clients applying the intermediaries do so to be able to get rid of high red tape applied by the officers. They prefer using intermediary instead of offering a bribe to the officers directly since they do not know which officers are corrupt (accepts a bribe offer) and how much bribe should be given to the corrupt officers. In our model, the client wants to offer a bribe to get rid of red tape, however, she hesitates due to the possibility of offering a bribe to an honest public officer and as a result getting a penalty. Client also hesitates due to the possibility of offering an amount of bribe lower than the reservation price of the corrupt officer; thus being rejected. Intermediaries, knowing which officers are corrupt and the reservation prices of those corrupt officers, decrease the risk of offering a bribe. Two cases; one with intermediary, the other without, in such a scenario is examined and the results of the two are compared. Copyright Springer Science + Business Media, Inc. 2005

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Corruption is an important social and ethical problem. Determining root causes of it should be the first step to fight it. In this study, using a dynamic panel data approach, we try to determine the likely causes of level of corruption in some of the former USSR countries and East Asian countries. Regression results show that, past values of corruption and the level of political rights in a country are the factors that are most affecting the level of corruption in a country. Degree of opennes to the foreign trade, interference of government in the economy, FDI inflows, degree of civil liberties seem not to have significant effect on corruption level in a country. Level of inflation, unemployment, per capita GDP seems not to be among the causes of corruption, but rather they are <span>“caused by the corruption”. There seems no significant differences between East </span><span>Asian Countries and post-communist countries in terms of corruption level, when the effect of other variables are kept constant. </span>

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