Abstract

"This paper studies the moral dilemma of bribery in the presence of official discretion. The moral dilemma is framed as a dynamic choice problem in which an official’s present biased temptation preferences that value bribery conflict with commitment preferences that place more value on honesty. The tension between temptation and commitment becomes salient in the presence of the official’s discretionary power. More discretion allows the official to lower red tape, which is socially beneficial, but it also makes bribery more tempting, thereby making a commitment to honesty more costly. Accordingly, a morally committed bureaucrat may choose less discretion (which generates more red tape) as a remedy to avoid being tempted by bribery. Whereas the welfare-maximizing policy will often impose high discretion, which generates psychic temptation costs on honest officials."

About the Authors

Ajit Mishra (pictured) is the chair of the Department of Economics and professor of economics at the University of Bath, with important contributions to the law and economics of crime and corruption. 

Andrew Samuel is a Professor of Economics at the Sellinger School of Business and Management at Loyola University Maryland. His research spans law, economics, and institutions, focusing on areas such as regulation, industrial organization, and the economics of corruption. With expertise in game theory and microeconomic theory, he explores the interaction between market forces and regulatory enforcement.

Publication Details

Year: 2024