That assumes that the government employees are independent of one another and will not "punish" the person reporting the incident.
What works better is a system where the PM alone is allowed to take bribes with impunity but no one else is allowed to. The reasoning behind this is it gives the PM and his inner circle sufficient financial independence to implement anti-corruption measures.
For example, the central government in China has been known to mete out capital punishments on mid-ranking politicians found to take bribes. This limits the base of people who are able to seek an economic rent on the basis of their position. Like any triangle, the people at the top may get filthy rich and in many sense untouchable; they will be able to keep the large pool of people below them honest.
This would only work if the top level official wants bribe only for high level project. The approach would fail in India, where every amount of bribe has fixed distribution, from bottom most official to the top.
Say for example you wallet got lost, and you need to file an police report. The bribe you pay at police station would not be to the local official alone, but a cut of it would extend all the way over to top till the Home secretary. No one wants to punish anyone in such cases. This allows top-most official to acquire a much larger wealth than they would if they stopped corruption at lower level
This type of bribes already occur through taxation, traffic fines and other processing charges. These allow public servants to earn a bonus on top of their normal wages.
This is the effect of bribery tainting everybody up the chain. However, if bribery were to be legalised only at the highest level, then the highest leaders will have no incentive to accept bad bribes from their subordinates.
What works better is a system where the PM alone is allowed to take bribes with impunity but no one else is allowed to. The reasoning behind this is it gives the PM and his inner circle sufficient financial independence to implement anti-corruption measures.
For example, the central government in China has been known to mete out capital punishments on mid-ranking politicians found to take bribes. This limits the base of people who are able to seek an economic rent on the basis of their position. Like any triangle, the people at the top may get filthy rich and in many sense untouchable; they will be able to keep the large pool of people below them honest.