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How Business Community Institutions Can Help Fight Corruption

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  • Avinash K. Dixit

Abstract

Collective action by the business community to counter corruption in the award of government licenses and contracts is analyzed, by analogy with contract enforcement institutions studied by economic historians and contract law scholars. The suggested anti-corruption institution comprises a no-bribery norm, a system to detect violations, and a multilateral ostracism penalty upon conviction in a tribunal. In combination with formal state law, a business institution of sufficient quality—probability of detection and severity of punishment—can eliminate corruption; a less good institution helps reduce it. The legal and communal institutions together achieve substantially better outcomes than either by itself.

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  • Avinash K. Dixit, 2015. "How Business Community Institutions Can Help Fight Corruption," The World Bank Economic Review, World Bank, vol. 29(suppl_1), pages 25-47.
    • Handle: RePEc:oup:wbecrv:v:29:y:2015:i:suppl_1:p:s25-s47.
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    File URL: http://hdl.handle.net/10.1093/wber/lhv016
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    1. Basu, Kaushik, 2011. "Why, for a Class of Bribes, the Act of Giving a Bribe should be Treated as Legal," MPRA Paper 50335, University Library of Munich, Germany.
    2. Karna Basu & Kaushik Basu & Tito Cordella, 2016. "Asymmetric Punishment as an Instrument of Corruption Control," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(6), pages 831-856, December.
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    2. Halit Gonenc & Bert Scholtens, 2019. "Responsibility and Performance Relationship in the Banking Industry," Sustainability, MDPI, vol. 11(12), pages 1-49, June.
    3. Leonardo A. Rocha & Maria Ester S. Dal Poz & Patrícia V.P.S. Lima & Ahmad S. Khan & Napiê G. A. Silva, 2019. "Corruption, bureaucracy and other institutional failures: the “cancer†of innovation and development," Economics Bulletin, AccessEcon, vol. 39(3), pages 1740-1754.
    4. Kaushik Basu, 2018. "A short history of India's economy: A chapter in the Asian drama," WIDER Working Paper Series wp-2018-124, World Institute for Development Economic Research (UNU-WIDER).
    5. Paunov C., 2014. "Democratizing intellectual property systems : how corruption hinders equal opportunities for firms," MERIT Working Papers 2014-077, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Jun Wen & Mingbo Zheng & Gen-Fu Feng & Sunwu Winfred Chen & Chun-Ping Chang, 2018. "Corruption And Innovation: Linear And Nonlinear Investigations Of Oecd Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 103-129, July.
    7. Paunov, Caroline, 2016. "Corruption's asymmetric impacts on firm innovation," Journal of Development Economics, Elsevier, vol. 118(C), pages 216-231.
    8. Basu,Kaushik, 2015. "The republic of beliefs : a new approach to ?law and economics?," Policy Research Working Paper Series 7259, The World Bank.
    9. Kaushik Basu, 2018. "A short history of India's economy : A chapter in the Asian drama," WIDER Working Paper Series 124, World Institute for Development Economic Research (UNU-WIDER).
    10. Burguet, Roberto & Iossa, Elisabetta & Spagnolo, Giancarlo, 2024. "Procurement cartels and the fight against (outsider) bribing," European Journal of Political Economy, Elsevier, vol. 81(C).

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