The Political Economy of Corruption--Causes and Consequences
Author: Susan Rose-Ackerman Date: 4/1/1996 (PDF, 200KB)
Private firms pay bribes to government officials for two reasons--to obtain benefits and to avoid costs. A corrupt firm, for example, may pay to be included in a list of qualified bidders for a contract, to have officials structure the bidding specifications so that it is the only qualified bidder, or to be selected as the winning contractor. Or to reduce tax payments, businesses may collude with tax collectors, dividing the savings between them. Susan Rose-Ackerman looks at the opportunities for illicit gain between the public and private sectors, the determinants of the size and incidence of bribes, and the political, economic, and distributive effects of corruption.