American Economic Journal - Economic Policy
Department of Economics
Theoretical work on disciplining corrupt agents has emphasized the role of expected future rents -- for example, efficiency wages. Yet taken seriously this approach implies that illicit future rents should also deter corruption. We study this "golden goose" effect in the context of a statutory wage increase in India's employment guarantee scheme, comparing official microrecords to original household survey data to measure corruption. We estimate large golden goose effects that reduced the total impact of the wage increase on theft by roughly 64 percent. In short, rent expectations matter. (JEL D73, D82, H83, J41, K42, O17, O21)
Niehaus, Paul, and Sandip Sukhtankar. 2013. "Corruption Dynamics: The Golden Goose Effect." American Economic Journal: Economic Policy, 5 (4): 230-69. DOI: 10.1257/pol.5.4.230
Dartmouth Digital Commons Citation
Niehaus, Paul and Sukhtankar, Sandip, "Corruption Dynamics: The Golden Goose Effect" (2013). Dartmouth Scholarship. 2364.