Administrative corruption in the static model of balancing common and private interests

Abstract

  This article is dedicated to examination of corruption in the previously researched static model of balancing common and private interests (SOCHI-models). In the previously considered two-level system, between the upper non-corrupted level and the lower – agents, is introduced the average level which in exchange for a bribe, can weaken the influence of the upper level. The upper level sets the minimum amount of resources for an agent to spend on general purposes. A supervisor, in exchange for a bribe, the role of which is played by the share of agent’s private income, can reduce this lower boundary, allowing the latter to spend more resources on private purposes. This article reviews the three-level hierarchical system “Principal-Supervisor-Agents”, where the supervisor uses the administrative corruption mechanism, which requires two descriptive and optimization approaches towards its examination. The descriptive approach suggests that the considered functions of bribery are known; while the optimization approach implies the use of Germeyer’s theorem. The author explores the impact of administrative corruption upon systemic congruence of the SOCHI-model: it is proven that the administrative corruption can only reduce congruence. The author finds the conditions that can beat or reduce administrative corruption can, as well as conditions when corruption is disadvantageous for supervisor or agent. The article determines the circle of agents that supervisor can exert influence upon.