Corruption and Technology-Induced Private Sector Development

Jean-François Ruhashyankiko and Etienne Yehoue

No 2006/198, IMF Working Papers from International Monetary Fund

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.

Keywords: WP; private sector development; economic development (search for similar items in EconPapers)
Pages: 32
Date: 2006-08-01
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Citations: View citations in EconPapers (2)

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