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The impact of liberalization on bureaucratic corruption

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  • Baksi, Soham
  • Bose, Pinaki
  • Pandey, Manish

Abstract

Liberalization increases the number of goods available for consumption within a country. Since bureaucrats value variety, this raises the marginal utility of accepting a bribe. This "benefit effect" is counteracted by an increasing "cost effect" from corruption deterrence activities that arise due to greater international pressure to curb corruption. The interaction of these two effects can lead to a non-monotonic relation between liberalization and corruption. Moreover, pre-commitment to deterrence activities is shown to be more effective in controlling corruption. Empirical evidence supports the existence of a non-monotonic relation between economic openness and corruption among developing countries.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 72 (2009)
Issue (Month): 1 (October)
Pages: 214-224

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Handle: RePEc:eee:jeborg:v:72:y:2009:i:1:p:214-224

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Corruption Bribery Bureaucracy Monitoring Liberalization;

References

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Cited by:
  1. Schumacher, Ingmar, 2013. "Political stability, corruption and trust in politicians," Economic Modelling, Elsevier, vol. 31(C), pages 359-369.
  2. Van-Ha Le & Jakob de Haan & Erik Dietzenbacher, 2013. "Do Higher Government Wages Reduce Corruption? Evidence Based on a Novel Dataset," CESifo Working Paper Series 4254, CESifo Group Munich.
  3. Vivekananda Mukherjee & Siddhartha Mitra, 2013. "Does a Salary Hike Reduce Corruption?," Economics Bulletin, AccessEcon, vol. 33(4), pages 2540-2544.

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