BRIBE or LOBBY ? ( it ’ s a matter of development )

@inproceedings{Harstad2005BRIBEOL,
  title={BRIBE or LOBBY ? ( it ’ s a matter of development )},
  author={B{\aa}rd Harstad and Jakob Svensson},
  year={2005}
}
Corruption and lobbying are to some extent substitutes. Through lobbying a firm may be able to "change the rules" to the firm’s advantage. Alternatively, a firm may bribe a bureaucrat to "bend the rules" and thus avoid the cost of compliance. But there are important differences. While a change in the rules is more permanent, the bureaucrat can hardly commit not to ask for bribes also in the future. Based on this simple assumption, and a simple growth model, we show that (i) an equilibrium with… CONTINUE READING

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