University / Organisation : Yale University
Paper or project ? paper
Title : Bad Politicians, Good Bureaucrats: Modelling Public Sector Corruption and Bureaucratic Reliability
File : Download
Abstract : This paper adds an additional perspective to existing accountability models by relaxing the assumption that all principals are principled. The proposed model combines theories of executive influence and pro-social motivation into a formal mechanism that explains how the different social welfare outcomes arise from the decisions of political principals and bureaucratic agents. Defining bureaucratic reliability as the choice to improve social welfare by selecting an efficient firm in a procurement environment, I show that the nature of the principal determines the existence of a high, intermediate or low reliability equilibrium. The main findings are that the corruption of the political principals may induce a situation in which the bureaucracy is trapped in a low reliability equilibrium, that dishonest principals are associated with fewer public-minded individuals in the bureaucracy, and that the corruption of the political regime and the level of economic development may also affect bureaucratic recruitment.