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The Economics of Corruption and the Corruption of Economics: An Institutionalist Perspective

Revista de Economía Institucional, Vol. 10, No. 18, First Semester, 2008

26 Pages Posted: 25 Jul 2008  

Geoffrey M. Hodgson

University of Hertfordshire

Shuxia Jiang

Xiamen University

Date Written: July, 24 2008

Abstract

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.

Keywords: corruption, rules, public and private benefit

JEL Classification: B52, D73

Suggested Citation

Hodgson, Geoffrey M. and Jiang, Shuxia, The Economics of Corruption and the Corruption of Economics: An Institutionalist Perspective (July, 24 2008). Revista de Economía Institucional, Vol. 10, No. 18, First Semester, 2008. Available at SSRN: https://ssrn.com/abstract=1174283

Geoffrey Hodgson (Contact Author)

University of Hertfordshire ( email )

Business School
Hatfield Herts, AL10 9AB
United Kingdom

HOME PAGE: http://www.geoffrey-hodgson.info

Shuxia Jiang

Xiamen University ( email )

Xiamen, Fujian 361005
China

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