%0 Report
        %A Bennett, John
%A Rablen, Matthew D.
        %T Bribery, Hold-Up and Bureaucratic Structure
        %D 2018
        %8 2018 Jun
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 11593
        %U https://www.iza.org/index.php/publications/dp11593
        %X We analyze the provision of infrastructure by a foreign investor when the domestic bureaucracy is corrupt, but puts some weight on domestic welfare. The investor may pay a bribe in return for a higher provisional contract price. After the investment has been sunk, the bureaucracy may hold up the investor, using the threat of expropriation to demand a lower final price or another bribe. Depending on the level of care for domestic welfare, greater bureaucratic centralization may increase or decrease domestic welfare. Because of the threat of hold-up, bribery may result in greater domestic welfare than the honest benchmark does.
        %K centralized bureaucracy
%K bureaucratic structure
%K renegotiation
%K hold-up
%K bribery
%K decentralized bureaucracy