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Corruption and Rent-Seeking

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  • Lambsdorff, Johann Graf
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    Abstract

    The rent-seeking theory was one of the first economic instruments developed to model corruption in the public sector. Comparing corruption with lobbying, it proposes that the former is the lesser of two evils, since lobbying entails the wastage of resources in the competition for preferential treatment. This study shows that the traditional rent-seeking theory misunderstands three factors: first, the impact of a corrupt monopoly on the rent's size; second, corruption as a motivation for supplying preferential treatment and third; that corruption involves a narrower range of interests than those of competitive lobbying. Taking these factors into consideration, the opposite argument is valid: corruption has worse welfare implications than alternative rent-seeking activities. Copyright 2002 by Kluwer Academic Publishers

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    Bibliographic Info

    Article provided by Springer in its journal Public Choice.

    Volume (Year): 113 (2002)
    Issue (Month): 1-2 (October)
    Pages: 97-125

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    Handle: RePEc:kap:pubcho:v:113:y:2002:i:1-2:p:97-125

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    Web page: http://www.springerlink.com/link.asp?id=100332

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    Cited by:
    1. Adam Nguyen & Wesley Cragg, 2012. "Interorganizational Favour Exchange and the Relationship Between Doing Well and Doing Good," Journal of Business Ethics, Springer, vol. 105(1), pages 53-68, January.
    2. Jellal, Mohamed & Bouzahzah, Mohamed, 2012. "Rentes et corruption au maroc théorie et evidence
      [Morocco rents and corruption theory and evidence]
      ," MPRA Paper 38750, University Library of Munich, Germany.
    3. Pyle, William, 2007. "Organized business, political regimes and property rights across the Russian Federation," BOFIT Discussion Papers 18/2007, Bank of Finland, Institute for Economies in Transition.
    4. Tina Søreide, 2006. "Business corruption, uncertainty and risk aversion," CMI Working Papers WP 2006: 4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    5. Hessami, Zohal, 2010. "Corruption and the Composition of Public Expenditures: Evidence from OECD Countries," MPRA Paper 25945, University Library of Munich, Germany.
    6. Douhan, Robin & Henrekson, Magnus, 2008. "Entrepreneurship and Second-best Institutions: Going Beyond Baumol’s Typology," Working Paper Series 766, Research Institute of Industrial Economics, revised 27 Aug 2009.
    7. Francesco Giovannoni, 2011. "Lobbying versus Corruption," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 9(1), pages 12-16, 05.
    8. Johann Graf Lambsdorff, 2004. "Korrupte Staatsangestellte oder korrupte Regierungen: wer schadet mehr?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(2), pages 200-211.
    9. Jellal, Mohamed, 2014. "Firmes industrielles concurrence et corruption
      [Industrial firms competition and corruption]
      ," MPRA Paper 57284, University Library of Munich, Germany.
    10. Joël CARIOLLE, 2014. "Corruption in Turbulent Times: a Response to Shocks?," Working Papers P106, FERDI.
    11. Frédéric Boehm, 2005. "Corrupción y captura en la regulación de los servicios públicos," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 7(13), pages 245-263, July-Dece.
    12. Marjit, Sugata & Mukherjee, Vivekananda, 2014. "Rent-Seeking and Reform: Relationship Revisited," MPRA Paper 56443, University Library of Munich, Germany.
    13. Joël CARIOLLE, 2014. "Corruption in Turbulent Times: a Response to Shocks?," Working Papers P106, FERDI.
    14. Denter, Philipp & Morgan, John & Sisak, Dana, 2011. ""Where Ignorance is Bliss, 'tis Folly to be Wise": Transparency in Contests," Economics Working Paper Series 1128, University of St. Gallen, School of Economics and Political Science.
    15. Ladislava Grochova & Tomas Otahal, 2011. "Corruption, Rule of Law, and Economic Efficiency: Selected Anecdotic Evidence of Bureaucratic Corruption from the Czech and Slovak Republics," MENDELU Working Papers in Business and Economics 2011-13, Mendel University in Brno, Faculty of Business and Economics.
    16. Tomas Otahal & Vaclav Rybacek, 2011. "Can Tight and Centralized Financial Regulation Prevent Financial Crises? Czech Government Bond Seignorage in the Historical Perspective," MENDELU Working Papers in Business and Economics 2011-14, Mendel University in Brno, Faculty of Business and Economics.
    17. Søreide, Tina, 2009. "Too risk averse to stay honest?: Business corruption, uncertainty and attitudes toward risk," International Review of Law and Economics, Elsevier, vol. 29(4), pages 388-395, December.

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