# kaal:claim:3782193-003

**Claim.** In a rigid competitive hierarchy governed by secular laws, internal corruption arises because each member's optimal strategy is to push the written rules to their limit, while externally any change in the problems the group faces can find the hierarchy unready.

**Type.** mechanism  **Support.** argued

**Holds when.**

- competitive hierarchies
- power relations codified in secular law

**Source quote.**

> Rigid competitive hierar- chies with secular laws face internal corruption as members' optimal strategy is to push the rules to the limit. From the outside, any change in the problems the group faces can find the hierarchy unready to face the new challenge.

**From.** Craig Calcaterra, Wulf A. Kaal, *Historical Sketches of Centralization vs. Decentralization* (2021), Chapter 9. Historical sketches of centralization vs. decentralization, page 3

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Historical Sketches of Centralization vs. Decentralization (2021). SSRN: https://ssrn.com/abstract=3782193

**Verify.** sha256 of source PDF `74df9cc9a19a098bdacd0424a4174795f6e184f7a31c8ee7541195186701ebd2` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Historical%20Sketches%20of%20Centralization%20vs.%20Decentralization.pdf

**Failure mode.** Rule-limit exploitation  (family: regulatory-arbitrage)

**Topics.** institutional-design, risk-and-incentives

**Keywords.** corruption, rule-of-law, secular-law, hierarchy, strategic-behavior

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