Controlling Fiscal Corruption
IMF Working Papers, August 1, 1997
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Bibliographic details
- Authors: Sheetal K. Chand, Karl Ove Moene
- Published: August 1, 1997
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451852363.001
Summary / Abstract
- This paper examines the issue of controlling fiscal corruption by providing incentives to fiscal officers.
- Structure:
- A case study of a successful attack on corruption that highlights the importance of attending to the conditions of service of fiscal officers.
- A model developed from the case study conclusions showing consistency with optimization behavior.
- Core conclusion: Simply providing bonuses is not enough. Corruption at higher levels of management has to be contained so as to allow bonuses to become more effective, and thereby to initiate a virtuous circle.
Case study findings
- Presents a successful attack on corruption.
- Emphasizes the importance of attending to the conditions of service of fiscal officers.
- Implied insight: Incentive schemes must consider the organizational and supervisory environment in which fiscal officers operate.
Model and theoretical conclusions
- Develops a model drawing on conclusions from the case study.
- Shows consistency between case-study insights and optimization behavior.
- Confirms that:
- Bonuses alone are insufficient to control fiscal corruption.
- Containment of corruption at higher management levels is necessary to make bonuses effective.
- Effective containment can initiate a virtuous circle improving fiscal performance.
Policy implications and recommendations
- Design incentive schemes (including bonuses) with attention to:
- Conditions of service of fiscal officers.
- Mechanisms to contain corruption at higher levels of management.
- Sequence reforms so that supervisory and management-level anti-corruption measures accompany or precede bonus-based incentives to ensure effectiveness.
Subjects and keywords
- Subject: Bonuses, Civil service, Corruption, Crime, Income and capital gains taxes, Labor, Revenue administration, Tax administration core functions, Tax evasion
- Keywords: Bonuses, Civil service, clearance certificate, constituted revenue authority, corruption, Fiscal performance, Ghana, incentives, revenue improvement, Tax administration core functions, tax authority, tax collector, tax collectors choice, tax collectors increase, tax evasion, tax income, tax officer, tax ratio, WP
Content in this bundle
- Controlling Fiscal Corruption - WP/97/100