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European Journal of Law and Economics

, Volume 47, Issue 2, pp 255–275 | Cite as

Gift policy, bribes and corruption

  • Mehmet BacEmail author
Article
  • 75 Downloads

Abstract

A ban on gifts in public offices partially deters bribery but may induce undeterred bribers to switch from gifts to money. The rise in the use of a more liquid instrument (money) increases the bribe acceptance rate and, possibly, the measure of unqualified applications approved by the office. A gift ban may thus amplify the social costs of corruption by allocating public resources to the wrong people. It is shown that the optimal limited gift ban with a value cap binding on “expensive” gifts dominates the free gifts policy. The limited ban has weaker deterrence than the complete ban but it may reduce the social costs of corruption by minimizing the switch from gifts to money.

Keywords

Gifts Liquidity Bribery Public policy Social costs 

JEL Classification

K42 H83 O17 

Notes

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Faculty of Arts and Social SciencesSabanci UniversityTuzlaTurkey

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