Corruption and market reform
AbstractMarket reforms in developing and transition economies have sometimes failed to deliver the desired welfare effects. Corruption may be an important reason for the ineffciency of market reforms, such as privatization campaigns. The present paper demonstrates how corruption can affect the choice of buyer of a public asset. Our main result is that market reform in highly corrupt societies is likely to result in less competition and less economic effciency than reform in less corrupt societies. We also demonstrate that the level of bribes in the sale of public assets does not necessarily increase in the government's emphasis on bribes.
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Bibliographic InfoPaper provided by CMI (Chr. Michelsen Institute), Bergen, Norway in its series CMI Working Papers with number WP 2003:7.
Length: 23 pages
Date of creation: 2003
Date of revision:
Corruption; market reform; privatization;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
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