Discrete Dynamics in Nature and Society
Volume 2011 (2011), Article ID 862396, 27 pages
doi:10.1155/2011/862396
Research Article

Complex Dynamics in a Growth Model with Corruption in Public Procurement

Dipartimento di Istituzioni Economiche e Finanziarie, Università di Macerata, Via Crescimbeni 20, 62100 Macerata, Italy

Received 24 May 2010; Accepted 15 January 2011

Academic Editor: Changhong Wang

Copyright © 2011 Serena Brianzoni et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

We study the relationship between corruption in public procurement and economic growth within the Solow framework in discrete time, while assuming that the public good is an input in the productive process and that the State fixes a monitoring level on corruption. The resulting model is a bidimensional triangular dynamic system able to generate endogenous fluctuations for certain values of some relevant parameters. We study the model from the analytical point of view and find that multiple equilibria with nonconnected basins are likely to emerge. We also perform a stability analysis and prove the existence of a compact global attractor. Finally, we focus on local and global bifurcations causing the transition to more and more complex asymptotic dynamics. In particular, as our map is nondifferentiable in a subset of the states space, we show that border collision bifurcations occur. Several numerical simulations support the analysis. Our study aims at demonstrating that no long-run equilibria with zero corruption exist and, furthermore, that periodic or aperiodic fluctuations in economic growth are likely to emerge. As a consequence, the economic system may be unpredictable or structurally unstable.