Corruption by design: Bribery in Chinese enterprise licensing

Journal Article (Journal Article)

This article analyzes as a game a common form of corruption in Chinese bureaucracies: payment of bribes to officials for a standard good that is not in fixed supply and to which those paying bribes are, in principle, fully entitled. Formal structures and informal expectations have been identified through field research as features of "institutional design" that indicate an asymmetric information game. Bribery is derived as an equilibrium solution in the game. Exercises in comparative statics reveal the robustness of bribery when game parameter values are altered to reflect changes in institutional design. The exercises indicate that reducing corruption, in the sense of reducing bribe sizes, is relatively unproblematic. To move away entirely from corrupt equilibria, however, requires very substantial changes in institutional design and may not be feasible through changes in formal structures alone.

Full Text

Duke Authors

Cited Authors

  • Manion, M

Published Date

  • January 1, 1996

Published In

Volume / Issue

  • 12 / 1

Start / End Page

  • 167 - 195

International Standard Serial Number (ISSN)

  • 8756-6222

Digital Object Identifier (DOI)

  • 10.1093/oxfordjournals.jleo.a023356

Citation Source

  • Scopus