Contributions

  • Angeletos, Marios - Contributor
  • Massachusetts Institute of Technology. Dept. of Economics - Contributor

Publication

2005 - Massachusetts Institute of Technology, Dept. of Economics, Cambridge, MA, Massachusetts

Language

English

Word Count

6,000 words, Guess

Page Count

24 pages

Identifiers

Description

Bigger governments raise the possibilities for corruption; more corruption may in turn raise the support for redistributive policies that intend to correct the inequality and injustice generated by corruption. We formalize these insights in a simple dynamic model. A positive feedback from past to current levels of taxation and corruption arises either when wealth originating in corruption and rent seeking is considered unfair, or when the ability to engage in corruption is unevenly distributed in the population. This feedback introduces persistence in the size of the government and the levels of corruption and inequality. Multiple steady states exist in some cases. Keywords: Corruption, rent seeking, inequality, fairness, redistribution, political economy. JEL Classifications: D31, E62, H2, P16.

Subjects

Series Statement

  • Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 05-16
  • Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 05-16.

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