A game theoretical analysis of the impact of income inequality and ethnic diversity on fiscal corruption

In this paper, we construct a theoretical game model with incomplete information to analyze the tax revenues of a multiethnic country, when fiscal corruption is widespread. Our proposal is that income inequality between ethnic groups causes differences leading to prejudice and discrimination among ethnic groups themselves and, as a consequence, this affects the control of corruption and evasion. Hence, the amount of tax revenues is proven to be dependent on the relevance of the income distribution between the ethnic groups.