Corruption, Inequality and Income Taxation

It is recognized that corrupt behavior determines the institutional types of an economic system where an institution is ruled out by economic agents (e.g. officials-public or private) abusing their role to procure gain for themselves (rent-seeking activities) or somebody else. In this vein, we study an evolutionary model of institutional corruption. We show that income inequality and income taxation are the main factors (explanatory variables) for fighting institutional corruption. We conclude with some feasible policies on institutions, beliefs and incentives to combat the corruption.