Corrupt Relational Contracting
Because corruption must be hidden from the public and is not enforced by courts it entails transaction costs, which are larger than those from legal exchange. This suggests that corrupt contracts are primarily relational contracts where legal exchange serves as a basis for sealing and enforcing corrupt agreements. Legal exchange not only provides for corrupt opportunities, but for the necessary enforcement mechanisms. Examples of such legal exchange are long-term business exchange, belonging to the same firm or political party or being embedded in social relationships. The latter may even comprise the engagement in charitable institutions. Reform should not only focus on limiting opportunities for corrupt behavior but also on impeding the enforcement of corrupt agreements.
|Date of creation:||01 May 2002|
|Contact details of provider:|| Postal: Platz der Göttinger Sieben 3 - D-37073 Göttingen|
Web page: http://www.economics.uni-goettingen.de
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:got:vwldps:113. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ben Schroeter)
If references are entirely missing, you can add them using this form.