We study an implicit contract model to shed light on the relationship
between the closedness of public service recruitment system and the corruption
rampant between private firms and public servants. By introducing access cost
which depends on the personal affinity between a predecessor and a successor
in the hierarchy of public bureaucracy, we can explain why a bureaucracy
filled with closed recruitment system is more corrupted than one with open
recruitment system, which is a stylized fact that we found from OECD and
IMD data. We show that the more open the recruitment system, the harder
to sustain the implicit corruption contract between a public official and a private
company.