Abstract

http://ssrn.com/abstract=720211
 
 

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Corruption, Inequality and Fairness


Alberto F. Alesina


Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

George-Marios Angeletos


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

April 29, 2005

MIT Department of Economics Working Paper No. 05-16; Harvard Institute of Economic Research Discussion Paper No. 2070

Abstract:     
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.

Number of Pages in PDF File: 26

Keywords: Corruption, rent seeking, inequality, fairness, redistribution, political economy

JEL Classification: D31, E62, H2, P16

working papers series


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Date posted: May 8, 2005  

Suggested Citation

Alesina, Alberto F. and Angeletos, George-Marios, Corruption, Inequality and Fairness (April 29, 2005). MIT Department of Economics Working Paper No. 05-16; Harvard Institute of Economic Research Discussion Paper No. 2070. Available at SSRN: http://ssrn.com/abstract=720211 or http://dx.doi.org/10.2139/ssrn.720211

Contact Information

Alberto F. Alesina (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-8388 (Phone)
617-495-7730 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
George-Marios Angeletos
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-251b
Cambridge, MA 02142
United States
617-452-3859 (Phone)
617-253-1330 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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