The New Economics of Corruption: a Survey and some New Results ALBERTO ADES AND RAFAEL DI TELLA Introduction Governments of all political colours in countries of all levels of wealth are aected by corruption scandals with a frequency and intensity that seems to be always on the increase. Corruption has become a ‘hot issue’ and is now a major topic of political competition, even in the industrialized democracies. Yet, to a large extent, economists have remained vague about what can be done to reduce it. A main concern is the lack of evidence in support of the main policy alternatives. This paper reviews the state of economic knowledge on the phenomenon of corruption, with special emphasis on the theory behind the most common policy proposals and the evidence that supports them. During the last thirty years or so economists from dierent fields have made scattered contributions to the analysis of corruption, so that by now a certain body of literature has emerged. The first published piece on corruption that received wide attention is Rose-Ackerman, 1 though the topic was also in the minds of people doing research in the economics of crime, 2 agency theory, 3 rent-seeking, 4 and development economics. 5 While theories abounded, a lack of data on corruption to test the theoretical contributions allowed conflicting theories on the causes and consequences of corruption to coexist. As a result, the field has been unable to provide coherent policy guidelines to curb corruption and has remained somewhat disconnected from the discussion arena, a place mainly dominated by lawyers, businessmen and judges. More recently, an emerging body of empirical research has begun to appear, employing subjective indices on corruption produced for business- related purposes. We organize the literature into two broad themes: theories about the causes of corruption and theories of its eects. With regard to the latter, we show how the new data has shed light on a controversy that originated in the 1960s about the theoretical possibility that corruption may #Political Studies Association 1997. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. We are grateful to Guillermo Mondino for helpful comments and suggestions. We wish to acknowledge financial support from the Fundacio´n Mediterra´nea. 1 Susan Rose-Ackerman, ‘The economics of corruption’, Journal of Public Economics, 4(2) (1975), 187–203. 2 Particularly Gary Becker and George Stigler, ‘Law enforcement, malfeasance and the compensation of enforcers’, Journal of Legal Studies, 3(1) (1974), 1–19. 3 M. Harris and A. Raviv, ‘Some results on incentive contracts with applications to education and employment, health insurance, and law enforcement’, American Economic Review, 68 (1978), 20–30. 4 Gordon Tullock, ‘The welfare costs of taris, monopolies and theft’, Western Economic Journal (now Economic Enquiry), 5 (1967), 224–32. 5 Gunnar Myrdal, Asian Drama: an Inquiry into the Poverty of Nations, vol. II (New York, Pantheon, 1968). Political Studies (1997), XLV, 496–515
The New Economics of Corruption: a Survey and some New Results
Jul 06, 2023
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Related Documents
