An Agent-Based Model of Administrative Corruption in Hierarchical Organisations

Bertold B. Kovács, Neil Yorke-Smith

Keywords: Administrative Corruption, Agent-Based Models, Complex Adaptive Systems, Collusion, Organisation Structure

TL;DR: We address the question of what level of hierarchy is optimal in an administrative organisation by means of agent-based simulation.

Abstract: Corruption is a familiar and pressing problem in the performance of administrative bureaucracies. Changing the organisational structure is one way ventured to combat corrupt practices within a hierarchical organisation. Previous works have studied organisational change from various lenses, including equation-based modelling. We address the question of what level of hierarchy is optimal in such an organisation by means of agent-based simulation. We argue that agent-based models are uniquely suited for the exploratory modelling of corruption due to their capturing of localised, individualised behaviours. Our findings are that a less hierarchical organisational structure: 1) tend to lead to less corrupt acts committed, and 2) tends to lead to more societal welfare generated -- however, 3) less corruption and more societal welfare do not always go hand in hand. We begin to reconcile these seemingly paradoxical results using theories from developmental economics.

Submission Number: 8