An Agent-Based Model of Administrative Corruption in Hierarchical Organisations

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 preliminary 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.