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Corruption and Competition

Author

Listed:
  • Allen, Franklin
  • Qian, Jun
  • Shen, Lin

Abstract

An interesting aspect of corruption is that its damaging effects on economic performance differ significantly across countries. In this paper, we show that if a central government col-lects sufficient taxes, it can curtail corruption by paying for performance of local govern-ment officials. An alternative way to reduce corruption is to introduce competition among local government officials. Difference in taxing ability and the magnitude of competition among government officials can help explain the heterogenous effects of corruption across countries.

Suggested Citation

  • Allen, Franklin & Qian, Jun & Shen, Lin, 2018. "Corruption and Competition," CEPR Discussion Papers 13218, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13218
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    References listed on IDEAS

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    Cited by:

    1. Li, Weijia & Roland, Gérard & Xie, Yang, 2020. "Erosion of state power, corruption control, and political stability," BOFIT Discussion Papers 5/2020, Bank of Finland, Institute for Economies in Transition.
    2. Allen, Franklin & Qian, Jun & Qian, Meijun, 2018. "A Review of China’s Institutions," CEPR Discussion Papers 13269, C.E.P.R. Discussion Papers.
    3. Li, Weijia & Roland, Gérard & Xie, Yang, 2020. "Erosion of state power, corruption control, and political stability," BOFIT Discussion Papers 5/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
    4. repec:zbw:bofitp:2020_005 is not listed on IDEAS

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    More about this item

    Keywords

    Corruption; Institutions; Competition; Taxes; User fee;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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