Seeds of Corruption : Do Market Institutions Matter?

[摘要] Ten years into the transition,corruption is so pervasive that it could jeopardize thebest-intentioned reform efforts. The authors present ananalytical framework for examining the role marketinstitutions play in rent-seeking and illicit behavior.Using recently available data on the incidence ofcorruption, and on institutional development, they providepreliminary evidence on the link between the development ofmarket institutions, and incentives for corruption.Virtually all of the indicators they examine appear to beimportant, but three are statistically significant: 1) theintensity of barriers to the entry of new business. 2) Theeffectiveness of the legal system. 3) The efficacy andcompetitiveness of services provided by infrastructuremonopolies. The main lesson emerging from their analysis: awell established system of market institutions - clear andtransparent rules, fully functioning checks and balances(including strong enforcement mechanisms), and a robustcompetitive environment - reduces opportunities forrent-seeking and hence incentives for corruption. Both thedesign, and effective implementation of such measures areimportant if a market system is to be effective. It is notenough, for example, to enact first-rate laws if they arenot enforced. The local political economy greatly affectswhether a given policy reform will curtail corruption.Especially important are the following factors in thepolitical economy: a) the credibility of thegovernment's commitment to carrying out announcedreforms. B) The degree to which government officials arecaptured by the entities they regulate or oversee. C) thestability of the government itself. D) The political powerof entrenched vested interests. Economists in the field ofindustrial organization, antitrust, and regulation have longrecognized these factors as potent determinants ofopportunistic behavior, corruption, and "capture"of government officials. Only now are they becomingconventional wisdom among specialists in economies in transition.

[发布机构] World Bank, Washington, DC

[学科分类] 社会科学、人文和艺术（综合）

[关键词] ACCOUNTABILITY;ACTIONS;ALLOCATION OF RESOURCES;ANTI-COMPETITIVE CONDUCT;ASSET MANAGEMENT