The Political Economy of Corruption

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Cover Half Title Series Information Title Page Copyright Page Dedication Table of Contents Contributors 1 The Political Economy of Corruption: Some New Perspectives 2 The Political Economy of Corruption: On the Link Between Corruption Control and Cronyism Corruption Control: Promise and Practice How Corruption Control May Exacerbate Corruption: A Model Corruption and Policy Acknowledgment Notes References 3 Corruption, Institutional Trust and Legitimacy: A Vicious Circle Introduction The Importance of Trust Corruption and Trust Trust, Corruption and Compliance The Legitimacy Trap in Anti-Corruption Reforms Breaking Out of the Legitimacy Trap in Anti-Corruption Reforms Conclusion References 4 Legal Systems and Corruption Introduction Legal Origins and Corruption The Model Equilibrium Analysis Model With Bribery Conclusion Notes References 5 Corruption and Optimal Enforcement Introduction The Enforcement Problem Corruption: Collusion Dilution Preventing Collusion Corruption: Extortion and Harassment Fighting Extortion Overenforcement? Conclusion Notes References 6 A Theory of Joint Evolution of Corruption and Growth Introduction The Environment To Be Or Not to Be Corrupt Corruption, Tax Rate, Rate of Return and Capital Dynamics Case 1: Absence of Corruption Case 2: Full Prevalence of Corruption The Joint Evolution of Corruption and Growth Conclusion Notes References 7 Corruption and the Financial Sector: An Examination of the Literature Introduction The Literature Sand the Wheels Hypothesis Government Ownership of Banks Regulation, Intervention and Lack of Supervision Insider Trading and Risk-Taking Behaviour Non-performing Loans Political Connections Financial Policy Grease the Wheels Hypothesis Competition for Resources Generate Investment Overcoming Regulation and Weak Institutions Higher Borrowing, Lending and Credit Constraints Other Studies Non-linearity Finance, Growth and Corruption From Finance to Corruption Conclusions Acknowledgement Notes References 8 Stopping the Rot I: A Review of Models and Experimental Methods of Corruption Experiments Introduction Models of Corruption Becker’s Model, Self-Interest and Reciprocity Gift Exchange Republic of Beliefs Use of Lab Experiments as a Methodological Tool External Validity and Generalizability Field and Lab-Based Experiments: Corruption and Dishonest Behavior Cross-Cultural Evidence Variation in Subject Characteristics and Testing of Policy Regimes Other Concerns Framing Effects, Moral Cost and Experimenter Demand Effect Experimental Corruption Games: Typology Conclusion Acknowledgments References 9 Stopping the Rot II: Consequences, Causes and Policy Lessons From the Recent Experiments On Corruption Introduction Consequences of Corruption Impact On Social Trust and Growth Impact On Public Good Provision and Tax Compliance Impact On Economic Inequality Causes of Corruption Importance of Culture Norms, Social Norms and Institutions Effect of Contagion: The Bad Apple Theory Effectiveness of Anticorruption Policies Using Monetary Incentives Wages, Salaries and Rewards Deterrence Hypothesis and Certainty vs. Severity of Punishment Introducing Competition Using Nonmonetary Measures Moral Costs Awareness About Negative Externalities Social Observability Some Additional Policy Levers Staff Rotation Role of Monitoring and Technology The Asymmetric Regime and Whistleblowing Role of Intermediaries Transparency Gender Roles Conclusion Notes References 10 The Past, Present and Future of Research On Gender and Corruption Empirical Origins Context Sensitivity and Reverse Causality Theoretical Proliferation Conclusion Notes References 11 The Culture-Corruption Hypothesis Revisited: Organizational Culture, Corruption and Worker Preferences Introduction A Culture of Corruption? Do Corrupt Workers Select Into Public Sector Jobs? Do Public Sector Workers Become More/Less Corrupt Over Time? Changing the Culture of Corruption Conclusions Notes References 12 How Advances in Information and Communication Technologies Impact Corruption? Introduction E-Government and Corruption Mobile Phones, Internet and Corruption Social Media and Corruption Concluding Remarks Notes References 13 Corruption in Europe: The Underestimated Devil and the Role of the European Union Introduction Corruption (Perception) in European Member States North-Western Europe Central and Eastern Europe The EPPO Protection of the General Regime of Conditionality for the Protection of the EU Budget and Breaches of the Rule-Of-Law Mechanism Southern Europe Discussion and Conclusion: The Devil Is in the Detail Notes References Annex Comparison Table Eurobarometer 14 Tackling Corruption: Practical Perspectives Introduction Corruption: The Problem Public Service Provision: The Process Factors Leading to the Emergence and Persistence of Corruption Addressing the Problem Process Simplification Reducing/Eliminating Discretion Interface of Officials With the Citizen Lax Oversight Mechanisms Difficult Recourse to Grievances Lack of Information On the Organization and Its Working Concluding Remarks Notes References Index