TY  - RPRT
        AU  - Bennett, John
AU  - Rablen, Matthew D.
        TI  - Bribery, Hold-Up and Bureaucratic Structure
        PY  - 2018/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 11593
        UR  - https://www.iza.org/index.php/publications/dp11593
        AB  - 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.
        KW  - centralized bureaucracy
KW  - bureaucratic structure
KW  - renegotiation
KW  - hold-up
KW  - bribery
KW  - decentralized bureaucracy
        ER  -