Three essays on the economics of corruption

Tetsuro Mizoguchi, Université D'Ottawa / University Of Ottawa, Université D'Ottawa / University Of Ottawa
This thesis contains three essays on the economics of corruption. The first essay presents a game-theoretic analysis of the Japanese defense market. The second essay presents a model---formulated from the mechanism design perspective---for analyzing the reemployment of high-ranking Japanese bureaucrats in the private sector. The third essay presents a bribery-bidding game with multiple corrupt bureaucrats and a private firm to analyze the corruption in entry regulation. The first essay presents
more » ... a game that incorporates these features of the defense procurement process. The results of the analysis suggest that the government pay for low-quality defenses goods at inflated prices. Furthermore, because Japanese firms are shielded from competition and because of the lack of a large foreign market, the Japanese defense industry has no incentive to engage in R&D to improve the quality of its defense goods. The second essay analyzes the implicit collusive relationship between government and private petroleum companies from the perspective of mechanism design. The game contains an explicit formalization of the implicit collusion between government and the petroleum companies it regulates. It has the structure of an optimal-auction problem---with a retiring bureaucrat as the object of the auction, government as the seller, and private petroleum companies as the potential buyers. This essay provides a necessary and sufficient condition for the direct-revelation mechanism to be truthfully implementable in Bayesian Nash equilibrium, and the characterization of the optimal mechanism for government. In the third essay, we analyze the corruption in entry regulation that involves an entrepreneur and a track of bureaucrats. First, because of the asymmetry of information, the entrepreneur might not obtain the required permit, although collectively as a group, the joint net payoff of the entrepreneur and the bureaucrats is positive. Second, the entrepreneur might pay the bribes without getting the permit. Third, the model confir [...]
doi:10.20381/ruor-12998 fatcat:yikcy2ld5jdwdeesldybmshpwq