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Corruption Dynamics: The Golden Goose Effect

Corruption Dynamics: The Golden Goose Effect Abstract Theoretical work on disciplining corrupt agents has emphasized the role of expected future rents—for example, efficiency wages. Yet taken seriously this approach implies that illicit future rents should also deter corruption. We study this “golden goose” effect in the context of a statutory wage increase in India's employment guarantee scheme, comparing official microrecords to original household survey data to measure corruption. We estimate large golden goose effects that reduced the total impact of the wage increase on theft by roughly 64 percent. In short, rent expectations matter. (JEL D73 , D82 , H83 , J41 , K42 , O17 , O21 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Economic Policy American Economic Association

Corruption Dynamics: The Golden Goose Effect

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References (47)

Publisher
American Economic Association
Copyright
Copyright © 2013 by the American Economic Association
Subject
Articles
ISSN
1945-7731
eISSN
1945-774x
DOI
10.1257/pol.5.4.230
Publisher site
See Article on Publisher Site

Abstract

Abstract Theoretical work on disciplining corrupt agents has emphasized the role of expected future rents—for example, efficiency wages. Yet taken seriously this approach implies that illicit future rents should also deter corruption. We study this “golden goose” effect in the context of a statutory wage increase in India's employment guarantee scheme, comparing official microrecords to original household survey data to measure corruption. We estimate large golden goose effects that reduced the total impact of the wage increase on theft by roughly 64 percent. In short, rent expectations matter. (JEL D73 , D82 , H83 , J41 , K42 , O17 , O21 )

Journal

American Economic Journal: Economic PolicyAmerican Economic Association

Published: Nov 1, 2013

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