Arbeitspapier

Slavery, Corruption, and Institutions

We develop a model where firms profit from coercing workers into employment under conditions violating national law and international conventions and where bureaucrats benefit from accepting bribes from detected perpetrators. Firms and bureaucrats are heterogeneous. Employers differ in their unscrupulousness regarding the use of slave labour whereas bureaucrats have differing intrinsic motivations to behave honestly. Moreover, there is a socially determined warm-glow effect: honest bureaucrats feel better if their colleagues are honest too. The determination of bribes is modelled via Nash bargaining between the firm and the corrupt civil servant. It is shown that multiple equilibria and hysteresis are possible. Depending on history, an economy may be trapped in a locally stable high-corruption, high-slavery equilibrium and major changes in government policies may be necessary to move the economy out of this equilibrium. Moreover, we show that trade bans that are effective in reducing slavery in the export industry tend to raise slavery in the remainder of the economy. It is possible that this leakage effect dominates the reduction of slavery in the export sector.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 7944

Klassifikation
Wirtschaft
Bureaucracy; Administrative Processes in Public Organizations; Corruption
Trade and Labor Market Interactions
Coercive Labor Markets
Thema
coerced labour
modern slavery
corruption
social norms
trade-related process standards

Ereignis
Geistige Schöpfung
(wer)
Rauscher, Michael
Willert, Bianca
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2019

Handle
Letzte Aktualisierung
20.09.2024, 08:20 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Rauscher, Michael
  • Willert, Bianca
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2019

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