The impact of liberalization on bureaucratic corruption

Soham Baksi (), Pinaki Bose and Manish Pandey

Journal of Economic Behavior & Organization, 2009, vol. 72, issue 1, 214-224

Abstract: Liberalization increases the number of goods available for consumption within a country. Since bureaucrats value variety, this raises the marginal utility of accepting a bribe. This "benefit effect" is counteracted by an increasing "cost effect" from corruption deterrence activities that arise due to greater international pressure to curb corruption. The interaction of these two effects can lead to a non-monotonic relation between liberalization and corruption. Moreover, pre-commitment to deterrence activities is shown to be more effective in controlling corruption. Empirical evidence supports the existence of a non-monotonic relation between economic openness and corruption among developing countries.

Keywords: Corruption; Bribery; Bureaucracy; Monitoring; Liberalization (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:72:y:2009:i:1:p:214-224

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