In this paper, we provide a new framework for analyzing corruption in public bureaucracies. The standard way to model corruption is as an example of moral hazard, which then leads to a focus on better monitoring and stricter penalties with the eradication of corruption as the final goal. We...

This paper tries to explain why government bureaucracies are often associated with red tape, corruption, and lack of incentives. The paper identifies two specific ingredients that together can provide an explanation: the fact that governments often act precisely in situations where markets fail...

India did not experience any food price spikes during 2007-08 when global food prices erupted. It was partly due to India's ban on exports of wheat and common rice. But the fiscal stimulus that the government provided in 2009 in the wake of G8 countries' call to avert economic recession, coupled...