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Corruption, intrinsic motivation and the love of praise

Research output: Contribution to journalArticle

Amrita Dhillon, Antonio Nicolo, Fei Xu

Original languageEnglish
Pages (from-to)1117-1138
JournalJournal of Public Economic Theory
Volume19
Issue number6
Early online date2 Nov 2017
DOIs
Publication statusPublished - Dec 2017

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King's Authors

Abstract

Do higher wages prevent corruption (bribe taking)? We investigate a setting where individuals who apply for public sector jobs are motivated not just by monetary incentives
but also by intrinsic motivation and concern for the collective reputation of their profession.
We show that an increase in monetary compensation may cause reputation concerned individuals to be more prone to participate in corruption due to an "overjustification" effect. The overall effect of monetary
incentives on fighting corruption crucially depends on the composition of
the pool of public sector workers for two reasons: first, different types of workers react
differently to the same policy; second, the composition of the pool of
workers affects individual behaviour through its effect on collective
reputation. These results imply in particular that policies to fight corruption should focus more on
increasing the collective reputation of the public sector rather than using monetary incentives which have perverse effects on some agents.

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