The Economics of Corruption and the Corruption of Economics: An Institutionalist Perspective
Geoffrey M. Hodgson
University of Hertfordshire
July, 24 2008
Revista de Economía Institucional, Vol. 10, No. 18, First Semester, 2008
This essay criticizes the commonplace definition of corruption as the misuse of public office for private gain. Both elements in this definition are wrong: corruption is also found in the private sector and in some exceptional cases it may not simply be for private gain. Another problem with prevailing treatments of corruption is their reliance on a utilitarian framework, which reduces ethical issues to matters of individual utility. This paper reinstates a non-utilitarian ethical dimension, and regards organizational corruption as involving collusion to violate established normative rules. It is further established that organizational corruption incurs irreducible social costs that cannot fully be internalized in a Coasean manner, because corruption itself undermines the very framework of property rights.
Number of Pages in PDF File: 26
Keywords: corruption, rules, public and private benefit
JEL Classification: B52, D73
Date posted: July 25, 2008
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