Favoritism in the Public Provision of Goods in Developing Countries

By Amitrajeet Batabyal and Peter Nijkamp

Abstract: Goods are often allocated publically by means of queuing processes in developing countries. In such situations, which group of citizens should a corrupt government official favor? In addition, what should be the basis for this favoritism? To the best of our knowledge, these salient questions have received scant attention in the literature. Consequently, we use queuing theory to first demonstrate that when allocating goods publically, a case can be made for favoring a particular group of citizens. Next, we show that the nature of this favoritism depends not only on the bribes received by the corrupt government official but also on the efficiency with which this official discharges his duties.

Paper http://econpapers.repec.org/scripts/redir.pl?u=http%3A%2F%2Fwww.tinbergen.nl%2Fdiscussionpapers%2F04013.pdf;h=repec:dgr:uvatin:20040013

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Favoritism Under Social Pressure

By Luis Garicano, Ignacio Palacios-Huerta and Canice Pendergast
The Review of Economics and Statistics, 2005, vol. 87, issue 2, pages 208-216

Abstract: This paper is concerned with the effect of nonmonetary incentives on behavior, in particular with the study of social pressure as a determinant of corruption. We offer empirical evidence that shows how professional soccer referees favor home teams in order to satisfy the crowds in the stadium. Referees have discretion over the addition of extra time at the end of a soccer game to compensate for lost time due to unusual stoppages. We find that referees systematically favor home teams by shortening close games where the home team is ahead, and lengthening close games where the home team is behind. They show no such bias for games that are not close. We further find that when the rewards for winning games increase, referees change their bias accordingly. Lastly, we identify that the mechanism through which bias operates is to satisfy the crowd, by documenting how the size and composition of the crowd affect referee favoritism.