This document summarizes research on corruption in developing countries. It discusses methods for estimating the magnitude of corruption, the efficiency costs of corruption, and determinants of corruption levels. Regarding estimates of corruption, methods include perceptions, surveys, direct observation, and market inference, but all may suffer from biases. Corruption imposes efficiency costs on firms, governments, and individuals. Determinants of corruption include compensation, monitoring/punishments, selection effects, transparency, and technology. Strategic interactions between corrupt officials can also impact corruption levels. Overall, the research shows that corruption responds to incentives and anti-corruption policies may have larger long-term effects than short-term effects.
This is a primer for those anti-corruption crusaders who need just a little more info on this monster to fight a more effective battle and argue with government representatives on the Lokpal Bill or any other similar matter. I wish I could too!
This is a primer for those anti-corruption crusaders who need just a little more info on this monster to fight a more effective battle and argue with government representatives on the Lokpal Bill or any other similar matter. I wish I could too!
Corruption in develeoping countries challenges & responseShahid Hussain Raja
Although corruption is not an exclusively Third World phenomena as corruption exists both in developed and developing countries in different forms and degrees yet its pervasiveness in the developing countries cannot be denied.
This presentation is an attempt to gauge this pervasiveness in the developing countries, find out its causes and lay down a framework for its minimization, if not total eradication
What is Corruption :
corruption can occur in difference scales. There is corruption that occurs as small fvours between a small number of people, corruption that affects the govt. on a large scale and corruption that is so prevalent that it is part of the everyday structure of society
Scales of Corruption :
There are three types of corruption. Given below
1.petty corruption – petty corruption occur at a smaller scale and with in established social farm works and governing firms
2.Grand corruption - Grand is defined as corruption occurring at the highest levels of government in a way that requires significant subversion of the political legal and economic system
3. Systemic corruption – Systemic corruption is corruption which is primirally due to the weakness of an organization or process
corruption in different sectors :
There are five types of corruption we can see in different sector of in our country. Such as govt/ public sector, political corruption, judicial corruption, police corruption, Unions.
Now we describe Public sector and political sectors corruption
1.Govt. corruption : Day by day corruption increase in GOVT. sector because of some corrupted officer’s and people’s. public sector corruption includes corruption of the political process and of government agencies such as the police as well as corruption in process of allocating public funds for contracts grants and hiring “ recent research by the world bank suggests that who makes policy decisions ( elected official or bureaucrats ) can be critical in determining the level of corruption because of the incentives different policy-makers face”
2. Political corruption – Political corruption is the abuse of public power, office or resources by elected government officials for personal gain a political cartoon from Harper’s weekly Janary 26th 1878 depicting U.S . secretary of the interior Carl Schurz investigating the Indian Bureau at the U.S department of the interior. The original caption for the cartoon is “ THE SECRETARY OF THE INTERIOR INVESTIGATING THE INDIAN BUREAU. GIVE HIM HIS DUE AND GIVE THEM THEIR DUES”
Causes of corruption -
cause of corruption are basically rotted deep into the political culture of BANGLADESH also due to the mass psychology under this types of political rule mass people of BANGLADESH are mostly illiterate, uneducated and there are common cause of corruption that is lack of civic senses.
Effect of corruption –
There is a bad effect of corruption in our country. Many people of our country are hampered from corruption now in our country every sectors are corrupted by some people who try to take the advantage from this and for this reason our government our economic system are hampered and for this reason we are TWO times champion in corruption. That is so insulting for our country, for corruption our country can not prosper. Bangladesh is a lower developing country and for corruption there are
Understanding Bureaucracy in Public AdministrationHAFIZUDIN YAHAYA
Basic noted for you to understand the concept and practice of bureaucracy in government administration. what is the factors that lead to failure of bureaucracy and how to enhance the better management in public policy.
Slide deck with thoughts on Corruption in the Philippines. Slides are from an undergraduate course on Philippine Politics and Governance I taught between 2003-2005.
Corruption in develeoping countries challenges & responseShahid Hussain Raja
Although corruption is not an exclusively Third World phenomena as corruption exists both in developed and developing countries in different forms and degrees yet its pervasiveness in the developing countries cannot be denied.
This presentation is an attempt to gauge this pervasiveness in the developing countries, find out its causes and lay down a framework for its minimization, if not total eradication
What is Corruption :
corruption can occur in difference scales. There is corruption that occurs as small fvours between a small number of people, corruption that affects the govt. on a large scale and corruption that is so prevalent that it is part of the everyday structure of society
Scales of Corruption :
There are three types of corruption. Given below
1.petty corruption – petty corruption occur at a smaller scale and with in established social farm works and governing firms
2.Grand corruption - Grand is defined as corruption occurring at the highest levels of government in a way that requires significant subversion of the political legal and economic system
3. Systemic corruption – Systemic corruption is corruption which is primirally due to the weakness of an organization or process
corruption in different sectors :
There are five types of corruption we can see in different sector of in our country. Such as govt/ public sector, political corruption, judicial corruption, police corruption, Unions.
Now we describe Public sector and political sectors corruption
1.Govt. corruption : Day by day corruption increase in GOVT. sector because of some corrupted officer’s and people’s. public sector corruption includes corruption of the political process and of government agencies such as the police as well as corruption in process of allocating public funds for contracts grants and hiring “ recent research by the world bank suggests that who makes policy decisions ( elected official or bureaucrats ) can be critical in determining the level of corruption because of the incentives different policy-makers face”
2. Political corruption – Political corruption is the abuse of public power, office or resources by elected government officials for personal gain a political cartoon from Harper’s weekly Janary 26th 1878 depicting U.S . secretary of the interior Carl Schurz investigating the Indian Bureau at the U.S department of the interior. The original caption for the cartoon is “ THE SECRETARY OF THE INTERIOR INVESTIGATING THE INDIAN BUREAU. GIVE HIM HIS DUE AND GIVE THEM THEIR DUES”
Causes of corruption -
cause of corruption are basically rotted deep into the political culture of BANGLADESH also due to the mass psychology under this types of political rule mass people of BANGLADESH are mostly illiterate, uneducated and there are common cause of corruption that is lack of civic senses.
Effect of corruption –
There is a bad effect of corruption in our country. Many people of our country are hampered from corruption now in our country every sectors are corrupted by some people who try to take the advantage from this and for this reason our government our economic system are hampered and for this reason we are TWO times champion in corruption. That is so insulting for our country, for corruption our country can not prosper. Bangladesh is a lower developing country and for corruption there are
Understanding Bureaucracy in Public AdministrationHAFIZUDIN YAHAYA
Basic noted for you to understand the concept and practice of bureaucracy in government administration. what is the factors that lead to failure of bureaucracy and how to enhance the better management in public policy.
Slide deck with thoughts on Corruption in the Philippines. Slides are from an undergraduate course on Philippine Politics and Governance I taught between 2003-2005.
Every day, all over the world, ordinary people bear the cost of corruption. In many countries, corruption affects people from birth until death. In Zimbabwe, women giving birth in a local hospital have been charged US$5 every time they scream as a penalty for raising false alarm.
1 In Bangladesh, the recent collapse of a multi-story factory, which killed more than 1,100 people due to a breach of basic safety standards, has been linked to allegations of corruption.
2 This report examines how corruption features in people’s lives around the world. Drawing on the results of a Transparency International survey of more than 114,000 respondents in 107 countries, it addresses people’s direct experiences with bribery and details their views on corruption in the main institutions in their countries. Significantly, Transparency International’s Global Corruption Barometer also provides insights into how willing and ready people are to act to stop corruption. The findings are clear: corruption is a very real burden, with more than one out of four respondents reporting having paid a bribe during the last year.3 When people are not in a position to afford a bribe, they might be prevented from buying a home, starting a business or accessing basic services. Corruption can, and often does, infringe on fundamental rights.
For those surviving on less than US$2 a day, and for women who are the primary caretakers of children around the globe, corruption and bribery are particularly devastating. For them, the additional cost of bribery can mean trade- offs are made between health and hunger, between school entrance fees and the shoes necessary to wear to school. Not only do people pay the costs of corruption directly, but their quality of life is also affected by less visible forms of corruption. When powerful groups buy influence over government decisions or when public funds are diverted into the coffers of the political elite, ordinary people suffer. When there is widespread belief that corruption prevails and the powerful in particular are able to get away with it, people lose faith in those entrusted with power.
As the Global Corruption Barometer 2013 shows, corruption is seen to be running through the foundations of the democratic and legal process in many countries, affecting public trust in political parties, the judiciary and the police, among other key institutions. Importantly, however, the people surveyed around the world as a part of the Global Corruption Barometer do not view themselves as powerless victims of corruption.
This presentation by Leah Ambler outlines some of the highlights from the OECD Foreign Bribery Report released in Paris on 2 December 2014.
Download the report at http://bit.ly/1rNWj1G
Find the webcast and launch event at http://oe.cd/LS
Bortoletti, corruption, some interesting topics, commissione europea, ipa zag...Maurizio Bortoletti
It does not seem strange, well, that's about to keep talking for a long time, sometimes with great emphasis to emphasize the decisive importance for the future of the country, but has failed to any concrete results: quite simply, it's about warning because the recruitment and promotion of the most capable introduce an intolerable element of unpredictability in the system and it is an attack on the right of co-optation. Well, that system - recalling Paolo Mancini in "In Praise of the subdivision" - which is like a twin sister, but much more palatable, the proverbial "sora camilla" nobody wants, but if everyone seize, still in the dark and silence, with the exception that denounce the subdivision of others, looking good from admitting that if they purloin some even their place of power but would not have been parcelling exercise of pluralism.
One of NIGERIA’S greatest challenges is CORRUPTION – in Public and Private Institutions – which has greatly affected her development as well as how her Citizens are treated in other countries. This analysis takes an in-depth look TI CPI of Nigeria from 1998 till date.
Anti-corruption legislation is are not appropriate for corruption situation in Bangladesh and are inadequately enforced or give protection to corrupts. Facilitation payments and gifts are illegal, but common in practice.
The attractiveness of grassroots corruption is explained by the mutual gain and minimal risk for the person accepting a bribe and the person who offers the bribe. A bribe helps to solve routine problems. Bribes can serve as a modest payment for minor violations of laws and regulations.
Running head CORRUPTION 5CorruptionAuthor’s Na.docxtodd271
Running head: CORRUPTION 5
Corruption
Author’s Name
Institutional Affiliation
Corruption
Introduction
Corruption is a significant crisis that kills the power of the constitution. Corruption diminishes the power of the society, economy, and social welfare of the nation. There are minimal chances of growth when corruption prevails. Thus, corruption is one of the biggest challenges facing the USA and is clearly shown by the form of administration. Factors that influence corruption is more, and the effect varies depending on the affected individuals. Typical corruption forms have taken way to inform of mishandling of policies, public funds misuse, and failure to submit to public growth projects. Current reports show that corruption is prevalent in many public sectors including but not limited to bribing of civil servants, misuse of political power, and bureaucrats using public power in the United States for a personal end.
Solution
s
Fighting corruption is a challenging task because individuals involved have either political or economic power this providing ways to manipulate the will of the weak. Regardless the report highlights possible ways to solve the issue of corruption while giving recommendations for implementation. First, it is possible to address corruption by engaging the public. Teaching the public about the effect of corruption would help combat the problem. That is, each person should be encouraged to follow the norms of the society and laws of the land (Olaguer, 2006). Following stands of morality would ensure that each person is watchful of individuals’ behaviors. Also, the public should learn how to spot instances of corruption and take necessary action when necessary. When the public is knowledgeable about the consequences of corruption, it is easier to engage in public participation in fighting the epidemic.
Next, corruption can be eradicated by employing a legal strategy. The process involves engaging the law, the judiciary, press, the police, and the media. By creating certainty and involving the bodies mention, it would be easier to discriminate corruption through justice. The legislature should be encouraged to review the laws and make clear the aspect of corrupt and corruption. Although the process might require more time, it would help understand when an individual is convicted of corruption (Heimann et al., 2008). Furthermore, the public should have the power to report against corrupt individuals in society without fear. While the legislature revises the laws, judicial civil servants would have the ability to sentence people from various social classes irrespective of their impact on society.
Third, decentralization of power is an essential step towards fighting corruption in the USA. This would give way for more transparency in the public sectors, procurement process, and budget process should be passed through mass media.
Best solution
Based on the time required to implement solutions, public participat.
FIGHTING CORRUPTION IN SOUTH ASIA: BUILDING ACCOUNTABILITY Dr Lendy Spires
Hardly a speech is delivered in South Asia without mention of the need to fight corruption in the region. Yet despite the lofty promises, corruption is on the rise. This report shows how a serious lack of political will on the part of governments to make laws work, means that government action to fight corruption is largely ineffective. The report draws on the findings of in-depth research on anti-corruption efforts in Bangladesh, India, Maldives, Nepal, Pakistan and SriLanka, which analysed almost 70 institutions across the six countries.
While none of the institutions assessed were found to be free from corruption risks, this report focuses in particular on the judiciary and anti-corruption agencies as critical actors in the fight against corruption. It highlights common challenges in the region and presents the governments of South Asia with a clear set of urgent priorities which need to be addressed in order to translate their anti-corruption rhetoric into concrete action.
The key findings of the report are:
1. Citizens find themselves unable to access key information on how their governments are performing in order to hold them to account.
2. The lack of meaningful protection for whistleblowers means that the chances of detecting wrongdoing by those in positions of power are slim.
3. Widespread political interference in the critical work of anti-corruption agencies and the judiciary makes them ineffective in keeping a check on government.
This situation presents serious challenges for the rule of law in the region. Some laws are inconsistent with international standards, while others are not equally enforced and independently adjudicated. As a result, corruption and other crimes are not effectively and impartially investigated or punished. This creates an atmosphere where the corrupt continue to get away with abusing their positions for their own personal gain at the public’s expense. Nevertheless, there have been some positive developments in the fight against corruption over the last 10 years. Most significantly, all six countries in this study have ratified the UN Convention against Corruption. However, there is still a long way to go to turn these commitments into meaningful action. The analysis presented here suggests a worrying reluctance on the part of the governments concerned to enable citizens to help shape the decisions that affect their daily lives.
The right to information:
A long way to go Citizens continue to face challenges in realising their right to information. When citizens’ right to know is denied, they are less able to hold decision makers to account for their actions. Comprehensive Right to Information (RTI) legislation is in place in Bangladesh, India and Nepal and has recently been passed in Maldives.
Similar to Corruption in developing countries (20)
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
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Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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1. Olken, Benjamin A. and Rohini Pande.
Annual Review of Economics (2012) 4:479–509.
Sharkhuu Munkhbat
Economics of Development
Cooperation
May 11, 2013
CORRUPTION IN DEVELOPING
COUNTRIES
2. I. Introduction
II. Estimating Magnitude of Corruption
III.Efficiency Costs of Corruption
IV.Determinants of Corruption
V. Some Caveats: Short and Long-run Effects
VI. Conclusions
2
Table of Contents
3. Increasing interest of the international policy community
in corruption:
• the OECD Anti-Bribery Convention,
• the UN convention against corruption,
• the World Bank Group Engagement on Governance and
Anticorruption and
• the Foreign Corrupt Practices Action of US Department of
Three main questions:
3
I. Introduction
• the OECD Anti-Bribery Convention,
• the UN convention against corruption,
• the World Bank Group Engagement on Governance and
Anticorruption
• the Foreign Corrupt Practices Action of US Department of Justice
and Security and Exchange Commission.
1. How prevalent is corruption?
2. What are the efficiency consequences of corruption?
3. What factors determines the level of corruption?
4. 4
1.The estimated levels of corruption are remarkably
heterogeneous, so there remains little consensus about the
magnitude of corruption.
3.Corrupt behavior can be modeled in line with a few general
economic principles:
• corrupt officials respond to monitoring and punishments
• standard market forces influence the level of bribes.
I. Introduction
2.Corrupt behavior has significant adverse consequences for
efficiency and equity outcomes.
There are three important findings:
5. 5
1. Perceptions:
The advantage: good coverage
• much easier to ask someone’s perceptions of corruption
than to actually measure corruption directly.
The challenge: may not measure corruption accurately
• perceptions of corruption fell even though actual
corruption rose
Road project: Villagers’ perceptions do not reflect actual corruption.
• increasing the actual missing expenditures by 10%,
• increases the probability a villager reports corruption by just 0.8%
II. Estimating the Magnitude
of Corruption
Methods to estimate the magnitude of corruption:
6. 6
2. Survey: It is the most direct way of measuring corruption.
Mocan (2008) find that income and education of the individual
have positive impacts on the likelihood of being asked for a
bribe in developing countries.
II. Estimating the Magnitude
of Corruption
Methods to estimate the magnitude of corruption:
Svensson (2003) surveyed firms in Uganda and examined how much
they paid in bribes.
On average, firms in the survey report bribe payments of about 88
USD per worker, or about 8 percent of their total costs.
7. 7
3. Direct Observation: Best way to measure corruption.
However, corrupt officials rarely will let corrupt behavior be
observed.
.
McMillan and Zoido (2004) analyzed detailed records in Peru, with
signed contracts and videotapes of accepting the bribes.
After videotapes became public, on average, politicians received
bribes ranging from 3,000 - 50,000 USD per month, depending on
whether the politician was in the opposition party or not.
II. Estimating the Magnitude
of Corruption
Methods to estimate the magnitude of corruption:
8. 8
4. Graft Estimation by Subtraction: Two measures for the
same quantity, one measure before corruption takes place and
one measure after corruption takes place.
The estimate of corruption is the difference between the two
measures.
Olken (2007) implemented a related methods in road project in
Indonesia.
He estimated that “missing expenditures”—the difference between
what the village claimed the road cost and what the engineers
estimated it actually cost—averaged about 24 percent of the total
cost of the road.
II. Estimating the Magnitude
of Corruption
Methods to estimate the magnitude of corruption:
9. 9
5. Market Inference: The theory of market equilibrium can be
used in combination with data on market activity.
The study Fisman (2001) estimated firm’s stock price movement
when Indonesian president Soeharto fell ill given the strength of its
political connections.
On net, for the most connected firms he estimates that about 23
percent of their value was due to Soeharto’s connections.
II. Estimating the Magnitude
of Corruption
Methods to estimate the magnitude of corruption:
10. 10
1. A strong negative relationship between income and
corruption: richer countries may appear less corrupt.
3. Virtually all of these “hard” estimates of corruption may
suffer from selection bias.
II. Estimating the Magnitude
of Corruption
2. Among countries at similar income levels, and even within
countries, there is marked heterogeneity in corruption levels.
How much corruption is there: main findings from estimates
11. 1. Impact on firms:
11
III. Efficiency Costs of Corruption
1. If bribes are charged for other types of government activities,
this could increase the effective marginal tax rate faced by
firms.
2. For a given effective marginal tax rate, corruption are more
distortionary than tax rate and can decrease business activity of
firms.
The regression of firm growth on the bribe and tax rate:
• A one percentage point increase in bribes reduces annual firm growth
by three percentage points, while a one percentage point increase in
taxes reduces annual firm growth by one percentage point.
• Negative impacts of bribes on firm activity are three times higher than
the corresponding impacts of taxation.
12. 12
Distortions: Corruption
could create additional
efficiency costs through
distortions.
Corrupt officials need to go
through a variety of more
convoluted procedures to
extract rents.
Price effects: If corruption
increases the cost of
government goods and
services, this could have an
effect similar to raising the
price of these goods and
services.
Corruption can have efficiency consequences through
impacts on government provisions of goods and services.
III. Efficiency Costs of Corruption
2. Impact on Government:
13. 13
The need to keep corrupt
activity secret could also
introduce distortions, as
procurement officials may
substitute the types of goods
that make hiding corruption
easier.
Since corruption is secret,
the government may not
anticipate the amounts lost
to corruption.
Example: Building thinner
roads than official engineering
guidelines
III. Efficiency Costs of Corruption
2. Impact on Government:
Two types of distortions
14. 3. Impact on Correcting Externalities:
14
III. Efficiency Costs of Corruption
If corruption decreases the government’s ability to correct an
externality, it may lead to inefficiency.
Someone can bribe a police officer instead of paying an official
fine.
Overweight trucks are a classic example of an externality.
Olken and Barron (2009) found that almost all trucks were
substantially over the weight limits and paid a bribe, instead to buy
an official ticket. ($0.5-$1 per payment)
15. 4. Impact on Individuals:
15
III. Efficiency Costs of Corruption
Corruption can affect individuals directly.
Hunt (2007) shows that corruption can be an additional cost on
the victims of misfortune—particularly crime victims.
The study also shows that in many situations crime victims
bribe more than other users who are not victims.
16. I. The Incentives Bureaucrats Face
16
IV. Determinants of Corruption
The bureaucrat will be corrupt if p(w-v)<(1-p)(b-d)
w: wage from government
v: outside option
p: probability of detection
Several options for reducing corruption:
• Increasing the wage for staying on job
• Decreasing the outside option by increasing punishments
• Increasing the probability of detection through monitoring
b: bribe
d: dishonesty cost
Nobody will be corrupt if p(w-v)>(1-p)(b-d)
If detected: fired, v
If undetected: w+b-d
17. A. Factors affect the Bureaucrat’s Decision
17
IV. Determinants of Corruption
1. Compensation: There is little evidence on impact of
compensation.
• higher public wages are associated with lower corruption.
• a doubling of government relative to manufacturing wages is
associated with only 0.5 point reduction in corruption index.
2. Monitoring and Punishments: Increasing monitoring
would reduce corruption.
Olken (2007), in the study of roads in Indonesia, found substantial
effects of the government audits, reducing corruption by 8
percentage points.
18. A. Factors affect the Bureaucrat’s Decision
18
IV. Determinants of Corruption
3. Selection: The selection of who chooses to become a
bureaucrat is potentially important.
• Ferraz and Finan (2010, b) find that higher salaries attract better
political candidates, though the effects show relatively modest.
• a 20 percent increase in wages only leads to a 0.2 increase in the
average years of schooling and a 0.05 increase in the number of
terms of experience
4. Incentives in the health and education sector are
conditioned on either worker absenteeism or directly on health
or education outcomes.
For example, performance-based pay can reduce absenteeism and in
the case of school teachers improve test scores of students.
19. B. The Market for Bribes:
Strategic interactions between corrupt officials
19
IV. Determinants of Corruption
If each agent does not fully internalize the effect of their bribes
on other agents’ bribe revenues, the total amount of bribes
would be higher.
Olken and Barron (2009) show that the average price paid by truck
drivers at checkpoints increases when the number of checkpoints
declines.
If bureaucrats are competing against one another, strategic
interactions could lead to lower bribes and more output.
Olken and Barron (2009), traveling the road should have been free,
so lower bribes would lead to greater road travel and greater social
efficiency.
20. II. Transparency: Three channels
20
IV. Determinants of Corruption
1. Enabling information about government actions, citizens
can better monitor government officials and political
accountability can be increased.
Djankov et al (2010) examined the relationship between disclosure
rules for information about parliament members and a numbers of
measures of quality of government and corruption.
They found that public disclosure of information is associated with
lower perceived corruption and better government.
21. II. Transparency: Three channels
21
IV. Determinants of Corruption
Reinikka and Svensson (2005) study how an information campaign
to monitor local officials can reduce corruption and increase
educational outputs.
They find that an increase in information resulted in an increase in
spending reaching the schools and ultimately an increase in school
enrollment and student learning.
2. Providing citizens with information on what they are
entitled to.
22. II. Transparency: Three channels
22
IV. Determinants of Corruption
3. Allowing citizens to signal interest in a particular
outcome.
Peisakhin and Pinto (2010) examined whether freedom-of-
information laws can improve access to basic public goods that are
otherwise attainable only through bribery.
The results suggest that requesting information under the freedom
of information law is a reasonable, though imperfect, substitute for
bribing an official.
23. III. Technology and Communication
23
IV. Determinants of Corruption
1. Technology can also have a substantial impact on corruption
by facilitating communication, which can enable better
monitoring.
Yang (2008) shows that pre-shipment imports inspection
programs increased import duty collection by 15 to 30
percentage points in the first five years after implementation.
24. III. Technology and Communication
24
IV. Determinants of Corruption
2. Technology has played an important role in the design and
administration of the tax system.
One key idea of tax enforcement is double-reporting, where
the tax department compares two independent reports about
tax performance
Kleven et al (2010) find that that the tax evasion rate is very small
for income subject to double-reporting and much higher for self-
reported income.
In a manual system actually doing the matching from all the double-
reported information would be very challenging, but once the
system is automated it is much easier.
25. III. Technology and Communication
25
IV. Determinants of Corruption
3. Technology holds promise is in procurement. Most of
governments, including developing countries, have been using
online procurement systems.
In context of road projects in India, Lewis-Faupel et al (2011) find
that electronic procurement leads to higher quality of roads and less
corruption.
Online procurement systems can potentially reduce corruption
by increasing access to information and by making the
procurement system more transparent.
26. The long and short run effects:
26
V. Some Caveats
• The long-run effects of an anti-corruption policy could be
smaller than the short-run effects.
• It could take time corrupt officials to learn how to
manipulate a new system.
• The long run effects could be greater than the short-run
effects.
• An anti-corruption policy could be more effective over time
if it encourages more low-corrupt officials to select into the
civil service.
27. VII. Conclusions
27
VII. Conclusions
• From the international perspective, there have been major efforts at
reducing corruption and promoting transparency.
• Micro-empirical analysis on corruption has dramatically increased.
• Corrupt officials respond to incentives and the threat of
punishment, even in corrupt environments.
• Strategic interactions between corrupt officials affect the level of
corruption.
• Information disclosures may incentivize politicians to perform
better and improve the incentives for high talent individuals to enter
politics.
• In some situations the long-term impacts of anti-corruption policies
exceed the short-run effects.
• Researchers have identified several innovative ways of measuring
corruption and economic theory offers significant guidance on how
to design anti-corruption policies.