Corruption as a Feature of Governmental Organization

Banfield, Edward C.

doi:10.1086/466826

Cited by 232 publications

(35 citation statements)

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“…The above corollary formalizes Ban…eld's (1975) view that "narrowing discretion [...] while preventing the agent from doing (corrupt) things that are slightly injurious to the principal it may at the same time prevent him from doing (non-corrupt) ones that would be very bene…cial to him. If simply to prevent corruption an agent is given a narrower discretion than would be optimal if there were no corruption, whatever losses are occasioned by his having a sub-optimal breadth of discretion must be counted as costs of preventing corruption."…”

Section: Optimal Discretion With Corruptionmentioning

confidence: 96%

“…3 Suppose now that, while the principal can set the guidelines for the procurement process by announcing the allocation mechanism that is to be employed, he is then forced to delegate the execution of the procurement process to an agent who has superior information on delivered quality. While giving weight to quality has the desirable e¢ciency properties described above, it obviously opens up the opportunity for the agent to be corrupt and favor a particular …rm bidding a high price on the grounds that it o¤ers a technically superior good.…”

Section: The Modelmentioning

confidence: 99%

“…In our setting this concern translates to analyzing how the marginal cost of producing quality a¤ects the surplus appropriated by the partners of a corrupt transaction via its direct in ‡uence on the cost of producing a minimally acceptable level of quality (q C ) and its indirect in ‡uence on the …rm's disagreement payo¤ via 14 Ban…eld (1975), p. 590.…”

Section: Bargaining Over a Bribementioning

confidence: 99%

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Corruption and competition in procurement

Celentani

Ganuza

2002

European Economic Review

146

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We consider a procurement problem in which the procurement agent is supposed to allocate the realization of a project according to a competitive mechanism that values bids in terms of the proposed price and quality. Potential bidders have private information about their production costs. Since the procurement agent is also in charge of verifying delivered quality, in exchange for a bribe, he can allow an arbitrary …rm to be awarded the realization of the project and to produce a quality level lower than the announced. We compute equilibrium corruption and we study the impact on corruption of the competitiveness of the environment, and in particular of: i) an increase in the number of potential suppliers of the good or service to be procured, and ii) an increase of competition in the market for procurement agents. We identify the e¤ects that in ‡uence equilibrium corruption and show that, contrary to conventional wisdom, corruption may well be increasing in competition.

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Section: Optimal Discretion With Corruptionmentioning

confidence: 96%

Section: The Modelmentioning

confidence: 99%

Section: Bargaining Over a Bribementioning

confidence: 99%

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Corruption and competition in procurement

Celentani

Ganuza

2002

European Economic Review

146

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“…I borrow from Becker (1968) the basic idea that incentives to engage in crime depend on the expected rewards and, because crime is inherently risky, the probability of being caught and convicted. Becker and Stigler (1974) were first to introduce a principal-agent model of corruption; Banfield (1975) and Rose-Ackerman (1978) have further extended their analysis. The major development in the second branch of literature that is relevant here is the extension of the classic principal-agent framework to include chains of principal-agent relationships, with pioneering papers by Tirole (1986Tirole ( , 1992 and Laffont (1990).…”

Section: Introductionmentioning

confidence: 99%

The Scope, Timing, and Type of Corruption

Baç

1998

International Review of Law and Economics

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This paper provides an analysis of the corruption problem in public organizations. It distinguishes between two types of corruption (individual/organized) and crime (bribe for a legal/illegal application), and between two occasions (before/after detection) for partial and full collusion. The integrated supervision procedure, where monitoring and review are centralized, displays higher individual corruption but a lower risk of organized corruption than the alternative, separated supervision procedure. Higher penalties and bribes, and lower rewards to supervisors, increase the risk of all types of collusion under both procedures. A trade-off is involved in the choice of the supervision procedure and penalties: Reducing individual corruption brings about a higher risk of organized corruption.

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“…However, there is an explicit recognition that employees under the public and private sectors tend to be incentivized differently. Banfield points to the material incentives and profit-seeking nature of private companies, while in the public sector, non-material factors such as job security, participation in important affairs, and "power and glory" serve as principal incentives [42]. There is also a lack of competition in the public sector in contrasts to the private sector, which encourages innovation, efficiency, and cost-reducing measures.…”

Section: Literature Review: Rethinking Regulation Of Water Utilitiesmentioning

confidence: 99%

Singapore and Sydney: Regulation and Market-Making

Leong

2017

Water

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Abstract:The different institutional forms of water utilities of Singapore and Sydney provide an interesting natural experiment on the role of a regulator in government-owned utilities (GOUs). In both cities, water is provided by GOUs. In Sydney, however, there is an independent regulator whereas in Singapore the Public Utilities Board is a statutory board without a regulator. This paper compared the regulation and market-making efforts by water utilities of Singapore and Sydney. We find that both are similar in quality of service, operational and economic efficiencies, and private sector investments. The difference lies in their choice of the instrument for involving the private sector. Sydney does this by appointing a specific regulator whereas Singapore uses contracts. Indeed, it argues that the government-owned water utilities of both Sydney and Singapore seek to capture as many benefits as possible from market-making efforts, that is, from mimicking private sector behaviors and by operating from the basic tenets of the regulatory state. Both countries seek to make rules addressing the "market failure" of a monopoly. In Sydney, such efforts are seen in the explicit contestability of the market and the high engagement with customers whereas in Singapore the efforts are more muted on both counts and are instead motivated toward developing water businesses as a whole.

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Corruption as a Feature of Governmental Organization

Cited by 232 publications

References 0 publications

Corruption and competition in procurement

Corruption and competition in procurement

The Scope, Timing, and Type of Corruption

Singapore and Sydney: Regulation and Market-Making

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