Document Type

Article

Publication Date

11-2013

Publication Title

American Economic Journal - Economic Policy

Abstract

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)

DOI

10.1257/pol.5.4.230

Included in

Economics Commons

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