Corruption and Government: Causes, Consequences, and Reform

Abstract:     
High levels of corruption limit investment and growth and lead to ineffective government. Developing countries and those making a transition from socialism are particularly at risk, but corruption is a worldwide phenomenon. Corruption creates inefficiencies and inequities, but reforms are possible to reduce the material benefits from payoffs. Corruption is not just an economic problem, however; it is also intertwined with politics. Reform may require changes in both constitutional structure and the underlying relationship of the market and the state. No single "blueprint" is possible, but the primary goal should be to reduce the gains from paying and receiving bribes, not simply to remove "bad apples."

Accepted Paper Series