Corruption, evasion and environmental policy: a game theory approach
Journal article
Cerqueti, R. and Coppier, R. (2016). Corruption, evasion and environmental policy: a game theory approach. IMA Journal of Management Mathematics. 27 (2), pp. 235-253. https://doi.org/10.1093/imaman/dpu019
Authors | Cerqueti, R. and Coppier, R. |
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Abstract | This paper deals with the interaction between polluting firms, tax inspectors and politicians in a corrupted context. We construct a theoretical game model with incomplete information to discuss the effects of such interaction on environmental policy. In this respect, we believe that the State may pursue environmental protection by employing two alternative strategies: on the one hand, the State can, through greater incentive for the tax inspector, increase the monitoring level that reduces the evasion and thus increase tax revenues (incentive channel); on the other hand, the State can, through greater environmental expenses, increase the compliance of the polluting firm which means lower evasion and, thus greater tax revenues (compliance channel). Clearly, more environmental expenses mean, ceteris paribus, less public resources for the tax inspector's incentive, and vice versa. In this context, we demonstrate that, for a country with a high (low) level of incentives, the incentive (compliance) channel is more efficient than the compliance (incentive) channel. This is a pre-copyedited, author-produced PDF of an article accepted for publication in IMA Journal of Management Mathematics following peer review. The version of record Corruption, evasion and environmental policy: a game theory approach is available online at: https://doi.org/10.1093/imaman/dpu019 |
Year | 2016 |
Journal | IMA Journal of Management Mathematics |
Journal citation | 27 (2), pp. 235-253 |
Publisher | Oxford University Press (OUP) |
ISSN | 1471-678X |
Digital Object Identifier (DOI) | https://doi.org/10.1093/imaman/dpu019 |
Web address (URL) | https://academic.oup.com/imaman/article-abstract/27/2/235/2363486?redirectedFrom=fulltext |
Publication dates | |
Apr 2016 | |
Online | 16 Oct 2014 |
Publication process dates | |
Accepted | 12 Sep 2014 |
Deposited | 09 Mar 2020 |
Accepted author manuscript | License File Access Level Open |
https://openresearch.lsbu.ac.uk/item/89365
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