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Discretionary power, rent-seeking and corruption

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  • Enrico Colombatto

Abstract

This article considers corruption as a breach of contract between a principal and an agent. This does not necessarily imply that corruption is immoral, for the nature of the violation actually depends on the features of the underlying contract. In this light, under many circumstances corruption turns out to be a rational and understandable reaction to institutional failures, which are often far from accidental. To this purpose, three different stylized institutional frameworks are analyzed: developed, undeveloped and transition countries. Contrary to the mainstream approach to corruption, it is here argued that the origin, scope and consequences of corruption vary significantly across the different frameworks. Normative conclusions should therefore be adjusted accordingly.

Suggested Citation

  • Enrico Colombatto, 2001. "Discretionary power, rent-seeking and corruption," ICER Working Papers 24-2001, ICER - International Centre for Economic Research.
    • Handle: RePEc:icr:wpicer:24-2001
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    File URL: http://www.biblioecon.unito.it/biblioservizi/RePEc/icr/wp2001/EC24-01.pdf
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    References listed on IDEAS

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    1. International Monetary Fund, 1997. "Why Worry About Corruption?," IMF Economic Issues 1997/003, International Monetary Fund.
    2. Emine Gürgen & Mr. Thomas A. Wolf, 2000. "Improving Governance and Fighting Corruption in the Baltic and CIS Countries: The Role of the IMF," IMF Working Papers 2000/001, International Monetary Fund.
    3. Xiaohang H. Sumner, 1996. "Commitment with Selfish Regulators," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 265-269, April.
    4. International Monetary Fund, 1998. "Roads to Nowhere; How Corruption in Public investment Hurts Growth," IMF Economic Issues 1998/001, International Monetary Fund.
    5. Banfield, Edward C, 1975. "Corruption as a Feature of Governmental Organization," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 587-605, December.
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    Cited by:

    1. Gallego, Jorge & Rivero, Gonzalo & Martínez, Juan, 2021. "Preventing rather than punishing: An early warning model of malfeasance in public procurement," International Journal of Forecasting, Elsevier, vol. 37(1), pages 360-377.

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