BrodCorrup - Corruption in Transition Finding Faith in...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Corruption in Transition Finding Faith in Free, Functional, and Flourishing Markets
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Corruption The World Bank defines corruption as the misuse of public power for private gain Difficult to measure directly because of secretive, dishonest nature. Various indices are used, such as TI’s Corruption Perceptions Index (CPI: a meta-survey) Global Competitiveness Report (GCR), International Country Risk Guide (ICRG), BEEPS, and Business International Index (BI). Correlation of at least 0.75 between quantitative indices indicates these are reliable scales of corruption.
Background image of page 2
World Bank Defines Two General Types of Corruption State capture: The actions of individuals, groups, or firms to influence the formation of laws, regulations, decrees, and other government policies to their own advantage as a result of transmitting hidden illicit benefits to public officials. Administrative corruption: Distorting existing laws, rules, and regulations to benefit state or non-state agents, also through illicit and non-transparent benefits to public officials. Ex. Shop owner forced to pay officials to overlook minor infractions.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
CPI of Selected Countries The Corruption Perception Index surveyed people in 145 countries in 2003, assigning countries a score of 0 (very corrupt) to 10 (very clean). The U.S. ranked 17th (145th being the worst). Latvia- 57th (3.8) Poland- 64th (3.6) China- 66th (3.4) Romania- 83rd (2.8) Russia- 86th (2.7) Ukraine- 106th (2.3) Tajikistan- 124th (1.8 )
Background image of page 4
Age-old Question: Grease or Sand? An potent economic question in past decades has been overall effect of corruption- is it negative or positive? Grease: Bypasses government inefficiency (Red Tape Model) Might increase motivation of tax officials Bribes may provide market mechanisms, but lack of legal transactional assurance and secret/uncompetitive nature of bribes reduces efficiency. In Ukraine, a construction firm submitted a bid of US$1 0 per square meter for tiling a major public building; the official disqualified it immediately, because the contractor had "dared" to submit a bid for less than the "minimum" bidding cost of US$30 per square meter. Grease often becomes fuel for excessive and discretionary regulations- leading to increased rent-seeking (corruption).
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Decidedly SAND!! Negative Effects of Corruption
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 22

BrodCorrup - Corruption in Transition Finding Faith in...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online