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Corruption Dynamics: The Golden Goose Effect

Year: 2013

Type: article

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)

Source: American Economic Journal Economic Policy

DOI: 10.1257/pol.5.4.230

Authors: Paul Niehaus, Sandip Sukhtankar

Institutions: University of California San Diego, Dartmouth College

Language: English

Topic: Corruption and Economic Development

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: bronze

Funder: National Science Foundation