T HE P ITFALLS OF A P ARTIALLY H ONEST B UREAUCRACY : B RIBERY, I NEFFICIENCY, AND B UREAUCRATIC D ELAY
by
Chris Ahlin and Pinaki Bose
Working Paper No. 02-W24 December 2002
DEPARTMENT OF ECONOMICS VANDERBILT UNIVERSITY
NASHVILLE, TN 37235
www.vanderbilt.edu/econ
Æ
Æ
Æ
!
!
! " ! #
$ %&'((' ) *
*
Æ
Æ !"!#
!!$# %& ' ()))# *+ ,
Æ &
% -
.
/ * +
Æ/
*
Æ +
Æ 0 Æ
1 0
Æ *
* *
*
*
Æ
" + ,-..(/ + ,-.01/ 2& 3
,'(((/ 4 4 5 6 7
4 8 Æ 4
7 1
*
2 .
/ 3 .
Æ /
2
. 0
4 .
. Æ /
*&
Æ
.
4
3 *
Æ
5*
Æ 1 '1
!67# 8 !6"# Æ
Æ Æ
0 Æ
4
0 & Æ
Æ
/
&
/
* 0
Æ
; Æ
< Æ
= !!9# >/2 !$"# *+
Æ
; Æ
Æ 8 1
/
*& 0
1
1
0 ( 0 &
9 <Æ
7 3 & ?
6
0 @Æ@ @@ @ @ @@ 0
Æ ;
0 @ @
+ .
@@ +
)
+ @ @ + 2 )+
2
*& *
;Æ
2 )# @ @ :
0 @ @ @@ *&
2 Æ
8 /
/+ Æ
3 *
(+
Æ
+ Æ ( +
Æ
2 1
( Æ)+
2 Æ@ 2
Æ A
9 :4 ;
: ; 2'5 < Æ4:
4 4
4
Æ 3
0
Æ
. 4 Æ
2 Æ 0
Æ
0 Æ
3
( 2+
+ 2(+
2 2 2( /
@ 2 2
B
(
(
2(
= 4 4 6 4
4 <
4 4
7 : 7 =
4 > 4
Æ 7
? " 4
< '
#Æ 8 4
7
(
C 2 Æ
( 0
Æ *& 1 ////
1 8 . .
0
Æ Æ
'
(
A * .
D
+
(+
9+
7+
(+ (+ 2 2 D (
2 * Æ /
4 Æ *&
Æ 4 *& *
Æ 3
3
E + Æ % Æ
2 F / F
&
Æ 0
4
0 B
(
0
( . /
///1
0 Æ
E
Æ 4 4 <
7;Æ @ 4
6 : Æ 4
Æ 4Æ <
'
1 & (
Æ 4
Æ 0
&
Æ*
8 G
1
Æ < Æ
. Æ * 1 Æ
3 * H )+ ( Æ
E + ) E
.
( 0
E D
#E D
# ?+
. * +
+ 4
* : . /7 '
( Æ A
E
+# 6+
Æ
0
* ? 6
E
E D+
#E DD+
+# $+
( +
0
+E
+
E
D D+
+
"+
H
+
, (Æ
+#
* *
Æ
+#
3 .
+
+Æ
+# !+
*
+
+
+
+
)+ 0
(4 @
+
E
( Æ
Æ
C 7
@ 1 I
IE
+
D
DÆ
D Æ
# )+
= Æ -
Æ2- 5
7
D
D
D
4/
D
D
4 /
4
/
3 . Æ@
Æ
D
D
E
0
&
E
E ) 1 )+
*
ED
E)
2
H
D
D
0
D
1 )
0
2
1)
0
2(
0
D
D
E
'
(
C& /
E
+
0
/
D
(+
0 @
*
½
½
½
¾
IE
+
D
DÆ
+#
! (+
9+
2 * *
6 " !+ 0
0
0 * Æ
E)
E "
+Æ
)#
E
"
+EÆ
E
E) "
+Æ
#
E) "
+EÆ
E
E) " Æ
+
7+
0 .
D
+
( Æ 1 0
+4 0
&
Æ
+4
Æ
A* )+ Æ
E)
E)+
E
E %
)+
+
Æ 2 Æ
( Æ
H &
@ *&
&
; 6
B
+#
0
+ B
+ *& @
. 6
@ 9
8 / /
0 / @
/.
+
Æ
& 4 4
< 8 <
4
<482
5A 7 #
>
E B
E
E E) !
+ E 7
E
E
H )+
3
+
+
)+
H 7
0
0
E
+
A E
7
4
E
7
D
+
0
D
E
A
5 /
2 *
+
A . '
0
E+
4 ?+
+ ' #
Æ
( *
#B
#E+
+#E+
# 6+
J #
Æ
!
1 Æ
# 3 Æ 0
/ 3/+ Æ
0 / * E )
Æ 4
Æ
E +4
Æ
( E Æ *
A .
0 )+ A 0
+
4
7 .
E):.
α δ 1
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2
1−τ τ
0
γ
g 1j 1 , g 1⋅ 1
γ(g 1⋅ 1 ;ν 4 ) γ(g 1⋅ 1 ;ν 3 ) γ(g 1⋅ 1 ;ν 2 )
γ(g 1⋅ 1 ;ν 1 )
AB
E Æ
E Æ 0
A
)+ Æ 1
+ Æ 1
( Æ 0 &
0
+ 1
2
+
)+ 0 *
" !
+
0 A
4
4+ K .
" !
E
D
Æ
Æ
$+
%
4+ Æ
E
E )
7+ H*
. 4
+ E Æ
.
4
+E 0
E
D
Æ
Æ
+D(
"+
E
D
Æ
+D(
!+
+ 4+ Æ
E
E) A
. )4
+E B
E
D
Æ
+D
()+
A
)4+
E )
E
)
4
(
0
#
# &
A A
# A
4+ E Æ C " !
+E
Æ+
Æ
# (+
*
EÆ
E) A
#A
4+E 2 " !
B
+E
Æ+
D( #
# ((+
* )
E Æ *
E
3 &
B
E
E) " )
#
E Æ
Æ
½
E) "
#
E
E) "
#
E Æ
D( #
¿
E
"
#
E)
E "
+
(9+
0 * A(
* . A
*
3 Æ (9 ? 6
τ
1−τ
0 ν 1 ν 2 ν 3 ν 4 1
g i⋅ t
ν
g 1⋅ 2 g 1⋅ 1 g 2⋅ 1
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2
Delay (to type 1)
Misallocate (give to type 2)
A (B 0 1 Æ@
#
E
) " )
#
+
Æ
D( # "
#
++ "
#
(7+
#E
) " )
#
+
Æ
Æ
"
#
+( + "
#
(?+
% # B . -
= 0 Æ L #
A
1
Æ
4 B Æ
+
) 0
LE
#Æ+D+# (6+
C * (7 (?
LE
) )
#
+Æ+
#
+Æ+( +
#
+Æ+( +D
+ Æ+D +( +#
#
+ Æ+( +D ++#
#
($+
% 3/
#
0 Æ
Æ / 5 Æ
0 A9 ./
DÆ+#E
DÆ+#
3 Æ 3/
)
Æ
ÆD+ *
(+D
+
" ,
/
,Æ2-5C2Æ52'-5/ <
Æ 2-'-5
100%
99%
98%
97%
96%
ν 1 ν 2 ν 3 ν 4 1
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2
Social Surplus (as % of first−best)
A9B <Æ
+
)
!" E
E
# )
# E
0 *
)
> Æ )+ (+
)Æ+ A 2 (
, $
) /
" !
Æ ! ()
0
E$+ $+
$ E )
Æ
D
(+D
Æ
Æ
+ A ()
Æ
D+ +
Æ
Æ
+
H . A * % )
Æ E E ( D%
Æ .
" # $ %& !
0 / Æ
5 Æ *
Æ
Æ
Æ
/
/
:.
FF
Æ /
Æ
0 B
& + '
4 &
&
3
&D+
D++
D
( 29+
. ()
2 29
0
/
(
H Æ 0
H 29
&
D
D
)# ("+
D 4 : 6
;8 7 &
- '44 4
&D++ ( 27+
0 2( /
2 ( Æ
. *
0 / /
0 Æ
0 1
&
0 @ 9 8 *& * )
IE
+
D
DÆ
D Æ
# (!+
:/
D
D
D
4/
D
D
4 /
4 /
2 29 27 * /
0
&D++
9)+
0/ &D
++ &+
+
+ 0
< < :;
&
2 Æ
B
E
E&D++ "
+
)#
E &D++
"
+E
E)
E &D+ "
+
9+
.
+ 0
* B
9)
H
("
+ A
D
E4
*
1 (!
%
D
E
*
+
0
= Æ 4
4 E
47 4
<
< 8
A
% ; > 4
4 4
" 4
C2-C 52- 5
-
448
D( %
" 84
C2-C 52- 5
-
E 4
,-2-C 5/ 4 88'0
<
α δ 1
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2 ω = 0.525
1−τ τ
0
γ
g 1j 1 , g 1⋅ 1
γ(g 1⋅ 1 ;ν 4 ) γ(g 1⋅ 1 ;ν w )
A 7B
&
9)
E)
A
+ E
0
2
)#
0 .*
E ) )#
*
E ) &D++)
0 )
)
.
("
0 )+ A 7 A
0 +
4 9 0
+ 1
2
+
)+ 0 *
2 7
. )4
+ E 4 . () 3 .
4
+E 0 " !
E
D
Æ
9(+
%
4+ Æ
+ E
+E) 9+ A
)4+
+E)
0
# &
A 7
4+ E C " !
B
+E
Æ+
# 99+
* )
H 9
. *
* &D++
C
*
0 *& E
4 29
0
τ
1−τ
0 ν w ν 4 1
g i⋅ t
ν
g 1 2 ⋅ g 1⋅ 1
g 2 1 ⋅ g 2⋅ 2
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2 ω = .525
A ?B 0 1 Æ@
0
E
E
E
E&D++ " )
#
E Æ
E&D++
"
#
E)
E&D+ "
+
97+
0 * A?
8
0 Æ 97 1 /
7 3 . ? Æ
8 9D4
7
E+
H # B
#E+
9?+
0 Æ L # H
+
) A
Æ +
) 0
0
LE
+D#Æ+# 96+
C * ./
DÆ+#E
DÆ+# A6
$ % Æ
D+ +
Æ
+
(
Æ &' E
0 *
0 Æ 0 .
)
9( )
;
.
100%
95%
90%
85%
ν w ν 4 1
α = 0.6, δ = 0.9 τ = 0.6, κ = 0.2 ω = 0.525
Social Surplus (as % of first−best)
A6B <Æ
(+
0 29 B
D++
D
; ()
H . A*
Æ E ( 9 E ( Æ /
.
Æ /
* Æ /
<* A 6
)
4
4
. :
5 /
/ *
1
1*
0 / Æ 1 *
' (
0 Æ /
Æ 0 /
.
0
0 /
/*
)
# 2: % : 2 ( ) *
(7+B("!M99(H!!$
(# %& 3 ' 0* B 2
G ) * $69+B96!M9!$N ()))
) * + , '7(+B)!M(7K ()))
7# 8 , 8 > H O !"!
?# 5 8 , - . O C 5
H 8 0 !6"
6# H '1 <
+ . "M7 !67
$# 8 ' Æ ) /
* 99+B?9M67N !!)
"# A 0' 2 ) *
!97+B$6)M$"2 !"?
!# >/2 - 0 . * 2 5
H O !$"
)# 2 , * * 1 79/?+B9"?M
7) 2!!$
# 2 > 3 = ( ) *
)"9+B?!!M6$ 2 !!9
