Bonus payments as an anti-corruption instrument: A theoretical approach
KAUST Grant NumberKUK-C1-013-04
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AbstractWe analyse bonus payments for officials, who transfer payments truthfully to the government rather than collecting bribes. We show that optimised bonus payments are always beneficial to the government, making them a more effective anti-corruption measure than simple wage increases. © 2013 Elsevier B.V.
CitationCracau D, Franz B (2013) Bonus payments as an anti-corruption instrument: A theoretical approach. Economics Letters 120: 1–4. Available: http://dx.doi.org/10.1016/j.econlet.2013.03.036.
SponsorsWe are very grateful to Eugen Dimant and an anonymous referee for helpful comments and suggestions.The second author would like to thank the financial support from the European Research Council under the European Community’s Seventh Framework Programme FP7/2007–2013/ERC grant agreement No. 239870. His work is also partly supported by Award No KUK-C1-013-04, made by King Abdullah University of Science and Technology (KAUST).