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Corruption and Technology-Induced Private Sector Development

Author

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  • Jean-François Ruhashyankiko
  • Mr. Etienne B Yehoue

Abstract

This paper asks whether corruption might be the outcome of a lack of outside options for public officials or civil servants. We propose an occupational choice model embedded in an agency framework to address the issue. We show that technology-induced private sector expansion leads to a decline in publicly supplied corruption as it provides outside options to public officials who might otherwise engage in corruption. We provide empirical evidence that strongly shows that technology-induced private sector development is associated with a decline in aggregate corruption. This suggests that the decline in publicly supplied corruption outweighs the potential increase in privately supplied corruption that could result from private sector expansion.

Suggested Citation

  • Jean-François Ruhashyankiko & Mr. Etienne B Yehoue, 2006. "Corruption and Technology-Induced Private Sector Development," IMF Working Papers 2006/198, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2006/198
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    References listed on IDEAS

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    6. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages 632-652, November.
    7. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
    8. Paldam, Martin, 2002. "The cross-country pattern of corruption: economics, culture and the seesaw dynamics," European Journal of Political Economy, Elsevier, vol. 18(2), pages 215-240, June.
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    1. repec:aer:wpaper:328 is not listed on IDEAS
    2. Fraga, Gilberto Joaquim & Santos, Helis Cristina Zanuto Andrade, 2020. "Corruption, production structure and economic development in developing countries," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.

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