A Game for Exploring Political and Bureaucratic Corruption

This article deals with the relationship between bureaucratic corruption and political corruption from the perspective of the industrial structure of a country. In so doing, we discuss whether political corruption and bureaucratic corruption can coexist. For this purpose, a suitable theoretical game model with imperfect information is constructed and solved.We demonstrate that the size of capital of a specific firm influences the decision of such firm to bribe the bureaucrat or lobby the government. Therefore, political and bureaucratic corruption are substitutes at the level of the firm because they depend on the capital of the firm, but they can coexist at a macro level. Some numerical experiments validate the theoretical model.