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The efficiency implications of corruption

Author

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  • Mushtaq H. Khan

    (Department of Economics, SOAS, University of London, London, UK)

Abstract

Corruption has different efficiency effects across countries. Conventional economic models of corruption are shown to be deficient in explaining these differences. Instead the article suggests that the distribution of power within the patron-client networks in which corruption is taking place is an important variable explaining the differences in the efficiency effects of corruption. Where patrons are powerful the range of rights transacted is limited and the allocation is likely to be efficiency maximizing. In contrast where patrons are weak the range of rights transacted is likely to be much wider with the rights allocated according to political calculations with large efficiency costs.

Suggested Citation

  • Mushtaq H. Khan, 1996. "The efficiency implications of corruption," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(5), pages 683-696.
    • Handle: RePEc:wly:jintdv:v:8:y:1996:i:5:p:683-696
    DOI: 10.1002/(SICI)1099-1328(199609)8:5<683::AID-JID411>3.0.CO;2-4
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    References listed on IDEAS

    as
    1. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
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    Cited by:

    1. Delgado, Michael S. & McCloud, Nadine & Kumbhakar, Subal C., 2014. "A generalized empirical model of corruption, foreign direct investment, and growth," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 298-316.
    2. Shrabani Saha & Kunal Sen, 2019. "The corruption-growth relationship: Do political institutions matter?," WIDER Working Paper Series wp-2019-65, World Institute for Development Economic Research (UNU-WIDER).
    3. Dogmus, Özge Can & Nielsen, Jonas Østergaard, 2020. "The on-paper hydropower boom: A case study of corruption in the hydropower sector in Bosnia and Herzegovina," Ecological Economics, Elsevier, vol. 172(C).
    4. Pritish Behuria, 2018. "The politics of upgrading in global value chains: The case of Rwanda’s coffee sector," Global Development Institute Working Paper Series esid-108-18, GDI, The University of Manchester.
    5. Mushtaq Khan, 2000. "The Political Economy of Industrial Policy in Pakistan 1947-1971," Working Papers 98, Department of Economics, SOAS University of London, UK.
    6. Bienvenido Ortega & Antonio Casquero & Jesús Sanjuán, 2016. "Corruption and Convergence in Human Development: Evidence from 69 Countries During 1990–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 691-719, June.
    7. Vicente Reyes, 2013. "The Impact of Automation on Elections," Journal of Developing Societies, , vol. 29(3), pages 259-285, September.
    8. Maciej Tymiński & Piotr Koryś, 2002. "Corruption. A Review of Selected Conceptions," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 6.
    9. Sanghoon Lee, 2017. "Media Freedom and Social Capital," Journal of Media Economics, Taylor & Francis Journals, vol. 30(1), pages 3-18, January.
    10. Akhmad Rizal Shidiq, 2003. "Decentralization And Rent Seeking In Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 51, pages 177-207, June.
    11. Anum Ellahi, 2020. "Corruption, Tax Evasion, and Economic Development in Economies with Decentralised Tax Administrative System," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(3), pages 419-438.
    12. Michael T. Rock, 2003. "The Politics of Development Policy and Development Policy Reform in New Order Indonesia," William Davidson Institute Working Papers Series 2003-632, William Davidson Institute at the University of Michigan.
    13. Mannan, Kazi Abdul & Farhana, Khandaker Mursheda & Chowdhury, G. M. Omar Faruque, 2021. "Social Network and Tax Evasion: Theoretical Model and Empirical Evidence in Bangladesh," MPRA Paper 108279, University Library of Munich, Germany, revised 2021.
    14. Fei Zhong, 2000. ""An Economic Analysis of Corruption, with Special Application to the Chinese Economy" (in Japanese)," CIRJE J-Series CIRJE-J-29, CIRJE, Faculty of Economics, University of Tokyo.
    15. Rock, Michael T. & Bonnett, Heidi, 2004. "The Comparative Politics of Corruption: Accounting for the East Asian Paradox in Empirical Studies of Corruption, Growth and Investment," World Development, Elsevier, vol. 32(6), pages 999-1017, June.

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