Corruption and the Rate of Temptation: Do Low Wages in the Civil Service Cause Corruption?
IMF Working Papers, June 1, 1997
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- Corruption and the Rate of Temptation: Do Low Wages in the Civil Service Cause Corruption?
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Bibliographic details
- Published: June 1, 1997
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451849424.001
Summary
- This paper develops and tests two efficiency wage models of corruption in the civil service.
- Under fair wage models, civil service wages are an important determinant of corruption.
- Under shirking models, the level of wages is of secondary importance, as potential bribes dwarf wage income.
- The empirical evidence points to a negative relationship between corruption and wages across developing countries.
- Tests as to the validity of the two different efficiency wage models are inconclusive.
Theoretical models examined
- Fair wage models:
- Civil service wages are an important determinant of corruption.
- Shirking models:
- The level of wages is of secondary importance because potential bribes dwarf wage income.
Empirical findings
- Evidence indicates a negative relationship between corruption and wages across developing countries.
- Empirical tests do not clearly favor either the fair wage model or the shirking model; results are inconclusive.
Policy-relevant implications (as presented)
- Wage levels in the civil service are a potential lever to influence corruption, per fair wage model logic.
- If shirking models hold, focusing solely on wages may have limited effect because potential bribes can dwarf wage income.
- Given inconclusive tests between models, policy design should consider both mechanisms when addressing corruption in the civil service.
Content in this bundle
- Corruption and the rate of Temptation: Do Low Wages in the Civil Service Couse Corruption? WP/97/73