High-level rent-seeking and corruption in African regimes : theory and cases
AbstractOne explanation for Africa's failure to develop is the weakness of its public institutions. The authors consider one aspect of that weakness: rent-seeking and corruption at the top of government. Under the conditions of their model, and autocrat who seeks to maximize personal financial return favors an inefficiently large public sector and distorts other public sector priorities more than does an autocrat who seeks to maximize national income. However, if civil servants and public officials are also venal, the ruler will not favor so large a government. To show how African regimes operate, the authors present four cases illustrating issues raised by their theoretical model. Among their observations about the relationship between the motivations of top officials and policies to control corruption and other types of rent-seeking are these: A kleptocrat whose decision variable is the level of government intervention in the economy will select an excessive level of interventions, in which national income is less than optimal. Like all monopolies, the kleptocrat seeks productive efficiency except where inefficiency creates extra rents. Facing a kleptocrat, citizens prefer a smaller than optimal-sized government but get one that is too big. A kleptocrat may need to permit lower-level officials to share in corrupt gains thus introducing additional costs. He or she will then favor a smaller government than if subordinates could be perfectly controlled. Dropping the assumption of a single dimension of government intervention, the kleptocrat will favor a different mixture of tax, spending, and regulatory programs than will a benevolent autocrat. Dropping the assumption that rulers are writing on a clean slate, decisions to privatize or nationalize firms can differ across autocratic regimes. In particular, although kleptocrats will often be reluctant to privatize, they may in some cases support privatization that a benevolent ruler would oppose. Investment in countries with kleptocratic rules may have an overly short-run orientation. When rent-seeking at top levels is pervasive, both natural resources and foreign aid under state control may hamper, not encourage, growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 1780.
Date of creation: 30 Jun 1997
Date of revision:
Decentralization; Economic Theory&Research; Environmental Economics&Policies; Payment Systems&Infrastructure; Labor Policies; Economic Theory&Research; National Governance; Environmental Economics&Policies; Governance Indicators; Health Economics&Finance;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chew, David C. E., 1990. "Internal adjustments to falling civil service salaries: Insights from Uganda," World Development, Elsevier, Elsevier, vol. 18(7), pages 1003-1014, July.
- John Mukum Mbaku, 1996. "Bureaucratic Corruption in Africa: The Futility of Cleanups," Cato Journal, Cato Journal, Cato Institute, Cato Journal, Cato Institute, vol. 16(1), pages 99-118, Spring/Su.
- Findlay, Ronald, 1989. "Is the new political economy relevant to developing countries ?," Policy Research Working Paper Series 292, The World Bank.
- Rodrik, Dani, 1994. "King Kong Meets Godzilla: The World Bank and The East Asian Miracle," CEPR Discussion Papers, C.E.P.R. Discussion Papers 944, C.E.P.R. Discussion Papers.
- Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, American Economic Association, vol. 89(4), pages 982-993, September.
- Ihonvbere, Julius O., 1993. "Economic crisis, structural adjustment and social crisis in Nigeria," World Development, Elsevier, Elsevier, vol. 21(1), pages 141-153, January.
- Paolo Mauro, 1996. "The Effects of Corruptionon Growth, Investment, and Government Expenditure," IMF Working Papers 96/98, International Monetary Fund.
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 681-712, August.
- Andvig, J.C. & Ove Moene, K., 1988.
"How Corruption May Corrupt,"
Memorandum, Oslo University, Department of Economics
20/1988, Oslo University, Department of Economics.
- Andvig, Jens Chr. & Moene, Karl Ove, 1990. "How corruption may corrupt," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 13(1), pages 63-76, January.
- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Wade, Robert, 1984. "Irrigation reform in conditions of populist anarchy : An Indian case," Journal of Development Economics, Elsevier, Elsevier, vol. 14(3), pages 285-303, April.
- Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, Elsevier, vol. 31(2), pages 215-236, November.
- Robert J. Barro, 1994. "Democracy & Growth," NBER Working Papers 4909, National Bureau of Economic Research, Inc.
- Bjorvatn, Kjetil & Soreide, Tina, 2005. "Corruption and privatization," European Journal of Political Economy, Elsevier, vol. 21(4), pages 903-914, December.
- Mikael Priks, 2011.
"Judiciaries in corrupt societies,"
Economics of Governance, Springer,
Springer, vol. 12(1), pages 75-88, March.
- Ufere, Nnaoke & Perelli, Sheri & Boland, Richard & Carlsson, Bo, 2012. "Merchants of Corruption: How Entrepreneurs Manufacture and Supply Bribes," World Development, Elsevier, Elsevier, vol. 40(12), pages 2440-2453.
- McAllister, Ryan R.J. & Smajgl, Alex & Asafu-Adjaye, John, 2007. "Forest logging and institutional thresholds in developing south-east Asian economies: A conceptual model," Forest Policy and Economics, Elsevier, Elsevier, vol. 9(8), pages 1079-1089, May.
- Mobolaji ‘Hakeem Ishola, 2012. "Fighting corruption: an expectation augmented approach," Humanomics: The International Journal of Systems and Ethics, Emerald Group Publishing, Emerald Group Publishing, vol. 28(2), pages 133-147, May.
- Susan-Rose Ackerman, 1997. "Corruption, Infefficiency and Economic Growth," Nordic Journal of Political Economy, Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 24, pages 3-20.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.