Turning the Wheels: The Cost Factor

Abstract

Corruption scandals are increasingly becoming rampant, especially in developing countries. The recent corruption scandals in India, in particular, have led to calls for legislation to establish an independent Public Ombudsman, who will be able to initiate investigations into allegations of corruption. In this paper we consider a typical problem that such an Ombudsman might face — that of initiating an enquiry into an allegation of corruption involving a large body of public officials. Recognizing that such investigations may be costly, we draw from the literature on statistical sampling to get estimates of the possible costs of an initial investigation, and report numerical results comparing the classical approach with the sequential sampling approach of Wald (1947).