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Corruption: Public and Private

Author

Listed:
  • Pellegrini Lorenzo
  • Luca Tasciotti

    () (Department of Economics, SOAS University of London, UK)

Abstract

Corruption is recognised as a major stumbling block to development and is associated with injustice and abuse of power. The consensus on the detrimental effects of corruption stands in contrast with the lack of agreement on the set of phenomena that fall under the heading ëcorruptioní and there is little discussion on whether the economics of corruption should also include corruption in the private sector. This question is relevant since different foci will have different theoretical bases and policy ramifications. We analyse the issue from two complementary perspectives: whether the impacts of corruption are limited to corruption in the public sector and whether a large public sector is associated with more corruption. First, we review theoretical and empirical perspectives on corruption, showing how concern over corruption in the private sector has a long history, dating back to Marshall and Coase. Second, we analyse corruptionís determinants using a panel data approach. The econometric analysis demonstrates how our indicator of government involvement in the economy is a poor predictor of corruption prevalence. Finally, the paper highlights the policy implications of the one-sided focus on corruption in the public sector and proposes an explicit acknowledgment of the role of corruption in the private sector.

Suggested Citation

  • Pellegrini Lorenzo & Luca Tasciotti, 2019. "Corruption: Public and Private," Working Papers 220, Department of Economics, SOAS, University of London, UK.
  • Handle: RePEc:soa:wpaper:220
    as

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    File URL: https://www.soas.ac.uk/economics/research/workingpapers/file139490.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    corruption; public sector; private sector; pooled analysis;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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