Koessler, Frédéric; Lambert-Mogiliansky, Ariane - In: Journal of Public Economics 120 (2014) C, pp. 144-156
We consider the problem faced by firms operating in a foreign country characterized by weak governance. Our focus is on extortion based on the threat of expropriation and bureaucratic harassment. The bureaucrat's bargaining power is characterized by a general extortion mechanism adapted from the...