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PUBLIC UTILITIES IN EGALITARIAN LDC's: THE ROLE OF BRIBERY IN ACHIEVING PARETO EFFICIENCY

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  • Salim Rashid

Abstract

This article points out that the egalitarian ideals adopted by many Less Developed Countries (LDC's) often lead to an inefficient allocation of resources because productive and unproductive agents are given equal access to public facilities. Productive agents then find it worthwhile to bribe their way into obtaining differential access to such public facilities —e.g., the telephone system. As long as bureaucrats look upon such bribes as windfall gains, the efficiency of the economic system can be improved. In practice, however, LDC bureaucracies often come to look upon such incomes as a systematic part of their remuneration and this leads them to pursue bribes rather than carry out their appointed duties; as a result, the system as a whole becomes increasingly inefficient.

Suggested Citation

  • Salim Rashid, 1981. "PUBLIC UTILITIES IN EGALITARIAN LDC's: THE ROLE OF BRIBERY IN ACHIEVING PARETO EFFICIENCY," Kyklos, Wiley Blackwell, vol. 34(3), pages 448-460, August.
    • Handle: RePEc:bla:kyklos:v:34:y:1981:i:3:p:448-460
    DOI: 10.1111/j.1467-6435.1981.tb01199.x
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    Cited by:

    1. Thum, Marcel, 2004. "Korruption," Dresden Discussion Paper Series in Economics 11/04, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    2. Thangamani Bhavan, 2020. "Is Corruption ‘Grease’ Or ‘Sand’ in the Wheels of Foreign Direct Investment Inflows in the South Asian Economies?," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(3), pages 185-193, September.
    3. Németh, Erzsébet & Martus, Bettina & Vargha, Bálint Tamás, 2018. "Integrity Risks and Controls of Public Services," Public Finance Quarterly, Corvinus University of Budapest, vol. 63(2), pages 155-175.
    4. Habib, M. & Zurawicki, L., 2001. "Country-level investments and the effect of corruption -- some empirical evidence," International Business Review, Elsevier, vol. 10(6), pages 687-700, December.
    5. Rahim M. Quazi, 2014. "Corruption and Foreign Direct Investment in East Asia and South Asia: An Econometric Study," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 231-242.
    6. Nguyen Ngoc Thach & Bui Hoang Ngoc, 2021. "Impact of Economic Freedom on Corruption Revisited in ASEAN Countries: A Bayesian Hierarchical Mixed-Effects Analysis," Economies, MDPI, vol. 9(1), pages 1-16, January.

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