On “tribes” and bribes

Bribes , Lobbying , and Development

When faced with a regulatory constraint, firms can either comply, bribe the regulator to get around the rule, or lobby the government to relax it. We analyze this choice, and its consequences, in a simple dynamic model. In equilibrium, when the level of development is low, firms are more inclined to bend the rule through bribery but they tend to switch to lobbying when the level of development ...

Are surgeons accepting bribes?

he relationship of orthopedic surgeons to medical device companies has come under increasing scrutiny in recent months. A front-page article in the September 22, 2005, issue of The New York Times reported that a Louisiana orthopedic surgeon paid $10,000 in fines after state investigators determined that his consulting agreement with an implant manufacturer was an improper conflict of interest u...

Manipulation through Bribes

We consider allocation rules that choose both an outcome and transfers, based on the agents’ reported valuations of the outcomes. Under a given allocation rule, a bribing situation exists when agent j could pay agent i to misreport his valuations, resulting in a net gain to both agents. A rule is bribe-proof if such opportunities never arise. The central result is that when a bribe-proof rule i...

Bonuses and bribes: Mood Effects in Memory

Bribes vs. Taxes: Market Structure and Incentives∗

Firms in developing countries often avoid paying taxes by making informal payments to business tax inspectors. These bribes increase the cost of operating a business, and the price charged to consumers. To decrease these costs, we designed a feedback incentive scheme for business tax inspectors that rewards them according to the anonymous evaluation submitted by inspected firms. The scheme incr...