کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
969669 1479434 2015 12 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Corruption and socially optimal entry
ترجمه فارسی عنوان
فساد و ورود بهینه اجتماعی
موضوعات مرتبط
علوم انسانی و اجتماعی اقتصاد، اقتصادسنجی و امور مالی اقتصاد و اقتصادسنجی
چکیده انگلیسی


• Free entry under imperfect competition and corrupt entry-certifying officials are two distortions to social efficiency.
• Pre-existing firms (including those in the shadow-economy) mitigate the distortion due to corruption.
• Competition between two corrupt officials restores second-best social efficiency: The two distortions exactly cancel out.
• The conclusions extend in a qualitative sense to the comparison between free entry and first best regulated entry.

The paper investigates the effects of corruption in the entry-certifying process on market structure and social welfare for a Cournot industry with linear demand and costs. To gain entry, a firm must pay a bribe-maximizing official a fixed percentage of anticipated profit, in addition to the usual set-up cost. This would lead to a monopoly, but only in markets without pre-existing or shadow-economy firms. A benevolent social planner may preempt the harmful effects of corruption by either manipulating the number of pre-existing firms in the market, or by setting up two independent (corrupt) licensing authorities. A socially optimal number of firms in the market may be reached by choosing the right number of pre-existing firms or by having exactly two licensing authorities. These mechanisms may be seen as restoring second-best efficiency in settings characterized by two major sources of distortion: Imperfect competition and corruption. We also show in an extension that the basic insights carry over in a qualitative sense to a model with quadratic costs and first best entry regulation.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Journal of Public Economics - Volume 123, March 2015, Pages 30–41
نویسندگان
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