Between two evils: Investors prefer grand corruption!

Johann Graf Lambsdorff

No V-31-05, Passauer Diskussionspapiere, Volkswirtschaftliche Reihe from University of Passau, Faculty of Business and Economics

Abstract: Recent empirical studies claim that, in addition to levels of corruption, investors are deterred by its unpredictability. I claim instead that it is petty corruption that deters investors. I employ seven subcomponents of corruption for a sample of 102 countries that appear in the 2003 Global Competitiveness Report of the WEF. The second principal component of this data depicts a grand, political type, embracing corruption in government policymaking and in judicial decisions as opposed to corruption in public utilities and loan applications. Grand corruption less deters investors because they might feel belonging to an inner circle of insiders that can profit from hidden arrangements. Grand corruption also entails relatively smaller organizational effort.

Keywords: Grand Corruption; Petty Corruption; Extortion; Predictability; Opportunism; Public Utilities; Laws and Policies; Judiciary (search for similar items in EconPapers)
JEL-codes: C21 F21 K42 O17 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/55027/1/684256142.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:upadvr:v3105

Access Statistics for this paper

More papers in Passauer Diskussionspapiere, Volkswirtschaftliche Reihe from University of Passau, Faculty of Business and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().