Corruption: A Control Theory Approach

Pacheco, Fernando;Santos, Pedro
(1984) , 11 pages

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  • Pacheco, FernandoUniversidade Catholica Portuguesa, Université Catholique de Louvain
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  • Santos, PedroUniversidade Catholica Portuguesa, Université Catholique de Louvain
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Abstract
This paper attempts an analysis of the problem of corruption, in a dynamic optimization framework. A simple ecological balance model is developed to study the evolution of the corrupt and non-corrupt populations. Government policies, used to reduce corruption, are oriented towards the maximization of the utility functional of the representative non-corrupt individual, and it is shown that for some values of the structural parameters it is not optimal to eliminate corruption, even in the long run. Furthermore, restricting our attention to the case where the two populations do not vanish, allowing for the participation of corrupt agents in the decision process not only increases the long run level of corruption, but may also give rise to the non-existence of an optimal policy leading to this steady state.
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Pacheco, F., & Santos, P. (1984). Corruption: A Control Theory Approach (Working Papers Institut des sciences économiques 8412). https://hdl.handle.net/2078.5/280792