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Institutionalized Corruption and the Kleptocratic State

Author

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  • Christian Harm
  • Joshua Charap

Abstract

This paper argues that corruption patterns are endogenous to political structures. Thus, corruption can be systemic and planned rather than decentralized and coincidental. In an economic system without law or property rights, a kleptocratic state may arise as a predatory hierarchy from a state of pure anarchy. A dictator minimizes the probability of a palace revolution by creating a system of patronage and loyalty through corrupt bureaucracy. Competitive corruption patterns are associated with anarchy and weak dictators, while strong dictators implement a system of monopolistic corruption. Efforts at public sector reform may meet resistance in countries featuring such systemic corruption.

Suggested Citation

  • Christian Harm & Joshua Charap, 1999. "Institutionalized Corruption and the Kleptocratic State," IMF Working Papers 99/91, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:99/91
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    Cited by:

    1. Caselli, Francesco & Morelli, Massimo, 2004. "Bad politicians," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 759-782, March.
    2. Philippe Le Billon, 2003. "Buying peace or fuelling war: the role of corruption in armed conflicts," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(4), pages 413-426.
    3. Godinez Jose & Garita Mauricio, 2016. "The dimensions of corruption and its impact on FDI decision making: the case of Guatemala," Business and Politics, De Gruyter, vol. 18(2), pages 123-141, August.
    4. Huff, W. G. & Dewit, G. & Oughton, C., 2001. "Credibility and Reputation Building in the Developmental State: A Model with East Asian Applications," World Development, Elsevier, vol. 29(4), pages 711-724, April.
    5. Pritchett, Lant, 2000. "The Tyranny of Concepts: CUDIE (Cumulated, Depreciated, Investment Effort) Is Not Capital," Journal of Economic Growth, Springer, vol. 5(4), pages 361-384, December.
    6. Ronen Bar-El, 2009. "Dictators, development, and the virtue of political instability," Public Choice, Springer, vol. 138(1), pages 29-44, January.
    7. Laurila, Juhani & Singh, Rupinder, 2000. "Sequential reform strategy : The case of Azerbaijan," BOFIT Discussion Papers 8/2000, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    Corruption; dictatorship; anarchy; governance; combat; organized crime; gang members; military; extortion;

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