By distorting group-beneficial resource allocation, corruption prevents the efficient governance of public goods. Corruption can be reduced, and public goods can thus be managed successfully, if appropriate systems for monitoring and sanctioning are put in place. The purpose of this project is to analyze which conditions facilitate the curbing of corruption. Using evolutionary game theory, we investigate a scenario in which members of a group are encouraged by an endogenous or exogenous social institution to contribute towards a public good. Each group member decides whether or not to contribute, and if no contribution is made, whether or not to attempt bribing the institution. The institution provides positive and/or negative incentives accordingly, with successful bribes causing non-contributing members to receive the same incentives as contributing members. Bribes are unsuccessful if they are rejected by the institution or if they are detected by other group members or an outside observer. On this basis, we identify conditions under which bribing strategies thrive or perish. We compare governance systems in which the enforcement of contributions is imposed from the outside or is jointly established by the group members, and in which the detection of bribes is operated from the outside or is jointly accomplished by the group members. Based on this analysis, we may consider extensions to multiple groups, multi-part institutions, multi-tier institutions, or dynamic public goods.
Last edited: 24 March 2016
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