Université de Lausanne
Ecole des HEC
Département d'économétrie et d'économie politique

DEEP-EPFL Seminars in Macroeconomics

Jeudi 13 décembre 2007, 12h00
Internef, Dorigny, salle 231

Bard HARSTAD
(Kellogg School of Management, Northwestern University, USA)

From Corruption to Lobbying and Economic Growth

Abstract
Why do we often observe corruption in poor countries and lobbying in rich ones, and what are the consequences? We present a simple growth model where firms can either bribe bureaucrats to "bend the rules" or lobby the government to "change the rules". While changing the rules is more permanent, the bureaucrat cannot commit not to ask for bribes also in the future. Based on this assumption, we find that firms bribe when the level of development is low, but they switch to lobbying when the level of development is sufficiently high. However, bribing leads to hold-up problems which discourage firms from investing, and the economy might get stuck in a poverty trap with bribing forever.

Site web du séminaire (avec texte en ligne): http://www.hec.unil.ch/deep/evenements-english/e-sem-all-2007-08.htm