HOW DO GROUPS STABILIZE CORRUPTION?
Article first published online: 18 FEB 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Journal of International Development
Volume 26, Issue 7, pages 1071–1091, October 2014
How to Cite
2014), HOW DO GROUPS STABILIZE CORRUPTION?, J. Int. Dev., 26, 1071–1091. doi: 10.1002/jid.2902(
- Issue published online: 7 OCT 2014
- Article first published online: 18 FEB 2013
- Manuscript Accepted: 2 JAN 2013
- Manuscript Revised: 6 DEC 2012
- Manuscript Received: 1 MAR 2011
- social structure;
- repeated games
This paper offers a theoretical explanation of the non-linear relationship between the social structure measured by the fractionalization of a society and its level of corruption. By using a standard repeated multi-stage-game of corruption, considering punishment strategies and information transmission inside sub-networks, we find the maximum level of corruption in highly fractionalized societies consisting of a large number of small groups. This is due to the effect of the relative size of sub-networks on the trade-off between the stabilizing effect of increasing the threat-point towards the official and the destabilizing effect of demanding greater internalization of the negative external effect of corruption within network members. Copyright © 2013 John Wiley & Sons, Ltd.