Categoria: wp2001

Discretionary Power, Rent-Seeking and Corruption

Enrico Colombatto, Univ. di Torino and ICER

Abstract: This article considers corruption as a breach of contract between a principal and an agent. This does not necessarily imply that corruption is immoral, for the nature of the violation actually depends on the features of the underlying contract. In this light, under many circumstances corruption turns out to be a rational and understandable reaction to institutional failures, which are often far from accidental.

To this purpose, three different stylized institutional frameworks are analyzed: developed, undeveloped and transition countries. Contrary to the mainstream approach to corruption, it is here
argued that the origin, scope and consequences of corruption vary significantly across the different frameworks. Normative conclusions should therefore be adjusted accordingly.

A Mathematical Theory of Evidence For G.L.S. Shakle

Guido Fioretti
Università di Firenze
ICER, Torino

Evidence Theory is a branch of mathematics that concerns the combination of empirical evidence in an individual’s mind in order to construct a coherent picture of reality. Designed to deal with unexpected empirical evidence suggesting new possibilities, evidence theory has a lot in common with Shackle’s idea of decision-making as a creative act. This essay investigates this connection in detail, pointing to the usefulness of evidence theory to formalise and extend Shackle’s decision theory.