Purpose: This paper aims to analyse the phenomenon of race to the bottom in a federation and provides answer to the question why developing countries are more prone to race to the bottom competition than developed countries. Design/methodology/approach: The paper considers a two-stage game...

Purpose – The paper aims to develop a theoretical model to explain the exact process through which the scale effect works to create a possible wedge between a perception-based ranking like the “Corruption Perception Index (CPI) ” and the axiomatic “absolute costs of corruption”-based...