Series: Contributions to Economic Analysis 284

Corruption, Development and the Environment, 2011

Corruption is an emotionally charged concept that inspires in most people immediate condemnation. These reactions can be channelled into supporting anticorruption strategies to deal with the problem, but the specific strategies will depend on the definition of the phenomenon at hand. These definitions can collide with what the public and international institutions have in mind when lamenting corruption and might also misfit with the analysis of some of the detrimental effects that corruption has on social welfare and with the formulation of sensible policies to deal with the problem. Here we will discuss the definition of corruption and the fallacies intrinsic in understandings of corruption that are based on one-sided definitions of it, focusing in particular to the questionable characterization of corruption as something that has to do only with the private sector. This specific definition is popular with economists and, in most cases covertly, it underpins the simplistic conclusion that to decrease corruption is sufficient to shrink the public sector or that there is a dilemma between market failures and corruption (e.g. Acemoglu and Verdier, 2000; for an exception see Hodgson and Jiang, 2007). 1.2. THE DEFINITION OF CORRUPTION Corruption is a multifaceted concept that escapes monolithic characterizations. Corruption, as defined in the dictionary, epitomizes moral decay, is intrinsically bad and subject of unconditional condemnation: it is the "impairment of integrity, virtue, or moral principle". 2 In search for definitions fit for the purpose of social sciences,

2010

In this paper, we focus on the economic research of corruption. In the first part, we define corruption, types of corruption, its factors and ways to measure it. This section brings together various definitions by notable authors of this domain, such as Begovic, Tanzi, Mauro or Lambsdorff. Before moving to the second section, we are presenting definitions, typologies and factors already researched by acclaimed authors. In the second part, we focus on the channels by which corruption transmits its effects through the economy. This section consists of two major sub-parts, the first one in which we take part in a vivid scientific discussion with the ''apologists'' of corruption, i.e. with those economists who underline positive roles of corruption. In the second sub-part of the second section, as a logic continuation of the previous sub-part, we are listing three important consequences of rampant corruption in one economy: consequences to economic growth, foreign direct investments and economic efficiency. Major contribution of this paper is compilation of significant scientific discoveries in the area, as well as bringing new arguments in the discussion on the economic consequences of corruption. The paper uses traditional approach of the New institutional economics (NIE), by underlining the importance of governance, transaction costs and rent seeking.

Econ J, 2003

Corruption is a persistent feature of human societies over time and space. The sale of parliamentary seats in 'rotten boroughs' in England before the Reform Act of 1832 and 'machine politics' in immigrant cities in the US at the turn of the 19th century are just two historical examples. Contemporaneous examples also abound and not only from developing countries such as Nigeria, India, and Philippines but also from transition economies such as Russia. Some of these and many other instances of corruption are extensively documented in The Politics of Corruption, edited by Robert Williams and associates. Its four volumes contain a large collection of articles published during the past 40 years in social science journals with contributions from political scientists, sociologists, anthropologists, law scholars, and a few economists including Andrei Shleifer and Robert W. Vishny. It is not surprising to find the work of Shleifer and Vishny represented in this interdisciplinary collection. As is evident from the collection of articles reprinted in The Grabbing Hand, they have, with various co-authors, made a large number of important contributions to the study of corruption and other government pathologies throughout the 1990s. Currently, the study of corruption is also high on the research agenda of international organisations such as the World Bank and the International Monetary Fund (IMF), and some of the most significant studies on corruption coming out of the IMF in recent years are collected in Governance, Corruption, and Economic Performance, edited by George T. Abed and Sanjeev Gupta. The aim of this article is to review developments in the economics literature on corruption in order to put some of this material into a broader analytic perspective. 1 Corruption is a many-faceted phenomenon and it is hard to give a precise and comprehensive definition. Yet, it is important to try. If for nothing else, the definition of the concept determines what gets modelled and what empiricists look for in the data. Many of the articles in volume 1 of The Politics of Corruption are devoted to a systematic discussion of this issue (e.g., Williams, 1976; Philp, 1997). Most economic models of corruption take a somewhat parsimonious view focusing largely on market corruption or bribery, and the starting point for economic theorising is, typically, some version of the following definition: Corruption is an act in which the power of public office is used for personal gain in a manner that contravenes the rules of the game (Jain, 2001). * I would like to thank Sanjit Dhami, Vania Sena, and Rozana Salih for helpful comments. Naturally, the author bears the full responsibility for any views expressed in the paper. 1 A theoretical as opposed to a practical or an empirical angle is chosen to differentiate this survey from existing ones such as Andvig

Corruption, Economic Analysis and International Law (Edward Elgar), 2014

'Although corruption has affected human society since its very birth with different intensity over time, it is not confined to any particular geographic region, country, social or political system or culture. Recently there has been widespread international determination to effectively curb such crime. Corruption: Economic Analysis and International Law by Marco Arnone and Leonardo Borlini reviews the richness and complexity of the ongoing research on corruption and shows the value of integrating a comprehensive economic understanding of its consequences and a critical assessment of the several legal instruments promoted by major intergovernmental organizations on this issue. This approach is particularly timely because, on the bright side, this book shows that economic crises may lead to greater social responsiveness in the face of attempts to drain public resources through corruption and bribery. The use of a wide range of economic models and the acute analysis of the contemporary evolution of traditional institutions belonging to the realm of international and European law represent two additional values of this work. Finally, the personal commitment of both authors to scientific research and professional activity related to public governance and anti-corruption reforms make this book a valuable source for further thought and analysis for scholars, public servants and practitioners.' Giorgio Sacerdoti, Professor of International and European Law, Bocconi University and former Chairman of the WTO Appellate Body and Vice President of the OECD Working Group on Corruption 'It is now rather common to speak of 'transnational law' as an approach to legal research that transcends national frontiers and domestic regulatory policies. Such a model accepts that rules can be generated not just by governments or by international cooperation, but also by individuals, corporations and various other organizations. As clearly evidenced by this book, unfortunately, one of the most successful transnational systems is the one based on corruption. The authors however, never to be defeated, show through a rigorous legal and economic analysis how instead, to develop policies and rules to fight what is sometimes perceived as an unavoidable phenomenon. In short, an invaluable addition to the study of this still largely unexplored area.' Andrea Biondi, Kings College London, UK 'In everyday understanding, corruption means degradation, decomposition, degeneracy, depravity. The concept is common to all cultures, and all dictionaries provide for very close descriptions. Corruption, in a specific connotation, is also defined by the statutory law of most – if not all – States as a a criminal offense: it is an illicit trade of official functions, committed betraying the very reason ('the duties') of one's office. Corruption alters, dismantles and depravates the idea of a civil society, as it critically wounds the bond of trust that lays at its very basis, and, thus, the deepest foundation of all social relations. To mariginalise corruption, and heal the damage it causes to society at large, it is necessary, first, to investigate what corruption is. By thoroughly analyzing the phenomenon per se, and offering a review of possible remedies against it, this book brilliantly and with exceptional efficacy, contributes to such an indispensable goal.' Gherardo Colombo, formerly Public Prosecutor, Milan Public Prosecutor's Office and Judge, Supreme Court of Italy 'To effectively combat corruption globally, the collection and dissemination of knowledge is crucial. This excellent book takes us a step forward in our collective efforts to better understand the causes and effects of corruption from an international perspective. Through its detailed analysis of the economic impact of corruption in a diverse range of countries, this publication provides us with a new resource to draw on in our future efforts to reduce corruption together worldwide.'

2010

Contemporary research on the institutional economics of corruption began with theoretical work that built on industrial organization, public finance, and price theory to isolate the incentives for paying and receiving bribes and to recommend policy responses based on that theory. My own 1978 book, Corruption: A Study in Political Economy, is an early example with its relatively straightforward application of economic concepts to the study of corruption. It used economic theory to understand what programs were especially susceptible to corruption and to recommend ways to reduce these incentives. That book largely relied on journalism to supply the facts because there were no statistical efforts to measure the harm caused by corruption. The closest empirical work by Anne Krueger (1974) and Jagdish Bhagwati (1974) measured the volume of rent seeking and illegal transactions in international trade by using the two sets of books available internationally-in exporting and in importing countries. Fortunately, in recent years it has become possible to move beyond journalism. Although empirical work on a topic that involves illegal activity remains difficult, empirical work employs a range of clever devices to generate quantitative estimates. This chapter summarizes the institutional economics framework that continues to yield important insights into the causes and consequences of corruption. After introducing the conceptual framework, it discusses empirical research derived from this theoretical perspective and includes some thoughts on fruitful directions for future research.

Economies

The article analyzes how economic theory usually investigates corruption. It describes the main traditional economic theories dealing with this issue—principal-agent theory (agency theory) and rent-seeking theory—and it emphasizes that both face some problems, especially their neglect of some important factors as to why corruption occurs which prevents them from accurately analyzing this phenomenon and proposing solutions on how to fight against it. The article further discusses whether institutional economics can overcome these problems. We show that it does, but that it needs to more seriously consider the environment in which corruption occurs. Redistribution system theory can serve as a useful aid here because it reveals that the source of corruption is an environment of undesirable redistribution. The article provides the characteristics of this type of redistribution and shows how its reduction also leads to the reduction in corruption. It can be concluded that economic theory...

Political Studies, 1997

à We are grateful to Guillermo Mondino for helpful comments and suggestions. We wish to acknowledge ®nancial support from the Fundacio n Mediterra nea.

European Journal of International Law, 2017

review essay "Corruption. Economic Analysis and International Law" Prof.Ferguson- EJIL 2017

Brazilian Journal of Political Economy, 2021

Este artigo sustenta que os modelos econômicos tradicionais de corrupção, baseados em otimização de custos e benefícios esperados, são insuficientes para compreender e enfrentar a desonestidade no mundo real. Embarca numa revisão da literatura para discutir os papéis exercidos por vieses cognitivos e preferências sociais nos desvios do comportamento honesto. Discute ainda as implicações da economia comportamental para o debate sobre como combater a corrupção e promover a integridade.