Corruption: a General Equilibrium Approach
نویسنده
چکیده
Most theoretical studies of corruption develop micro models of individual acts while empirical papers study corruption at the country level. We build an agent-based model to provide the missing link between these two groups. Here the societal corruption level is derived from individual corruption levels optimally chosen by agents with varying risk aversion and human capital. It, in turn, affects the risk-return profile of corruption for the individual agents. Simulating a multi-generational economy with heterogeneous agents we show that there are locally stable equilibrium corruption levels with certain socioeconomic determinants. However there are situations when corruption can rise till it stifles all economic activity. * The author gratefully acknowledges helpful remarks and suggestions from Antonio Bernardo, Daniel Treisman, Joe Kairys, Richard Roll and the participants of the 2000 Computing in Economics and Finance (CEF) conference at Barcelona. All errors and flaws are the sole responsibility of the author. + Address: DuPree College of Management, Georgia Institute of Technology, 755 Ferst Drive, Atlanta, GA 30332-0520; Tel: (404) 894-5109; Fax: (404) 894-6030; E-mail: [email protected]
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