MetaTOC stay on top of your field, easily

Asymmetric Punishment as an Instrument of Corruption Control

, ,

Journal of Public Economic Theory

Published online on


The control of bribery is a policy objective in many developing countries. It has been argued that asymmetric punishments could reduce bribery by incentivizing whistle‐blowing. This paper investigates the role played by asymmetric punishment in a setting where bribe size is determined by Nash bargaining, detection is costly, and detection rates are set endogenously. First, if whistle‐blowing is infeasible, the symmetry properties of punishment are irrelevant to bribery deterrence but not to bribe size. Bribery disappears if expected penalties are sufficiently high; otherwise, bribe sizes rise as expected penalties rise. Second, when the bribe‐giver may whistle‐blow, a switch from symmetric to asymmetric punishment eliminates bribery only if whistle‐blowing is cheap and the stakes are low. When bribery persists, multiple bribe sizes could survive in equilibrium. The paper derives parameter values under which each of these outcomes occurs, and discusses implications for welfare and the design of policy.