Collusion in local public works

• 成果类型: Article
• 署名作者: Besfamille, M
• 署名单位: Universidad Torcuato Di Tella
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.0020-6598.2004.00302.x
• 发表日期: 2004
• 页码: 1193-1219
• 关键词: corruption; transfers

摘要

A hierarchical model of collusion in local public works is presented. A local authority plans to undertake a project, delegating its construction to a construction firm. Both of them know the project's cost. However, the federal government decides whether to subsidize the project without knowing its cost. Therefore, the local authority and the constructor may agree to misreport their private information, in order to benefit from the allocation of federal grants. We show that different collusive behaviors may emerge. Then, we characterize the optimal federal grant policy. Finally, we investigate when constructing (shutting down) useless (valuable) projects is optimal.