Costs of Corruption and Potential Remedies from an Economic Point of View Cover Image

Ekonomický pohľad na škodlivosť korupcie a jej možné riešenia
Costs of Corruption and Potential Remedies from an Economic Point of View

Author(s): Miroslav Beblavý
Subject(s): Economy
Published by: Ekonomický ústav SAV a Prognostický ústav SAV
Keywords: bureaucracy; administrative processes in public organizations; corruption; externalities; informal economy; underground economy

Summary/Abstract: The article examines circumstances under which a corruption is harmful from an economic point of view and explores potential instruments to decrease corruption. Even though acts of corruption are generally voluntary exchanges, they are usually not social optimal because of presence of negative externalities. The conditions under which they would be socially optimal are extremely rare in real life. The article identifies three anticorruption strategies: decreasing benefits of corruption, increasing costs of corruption and increasing probability of uncovering corruption. It focuses in particular on measure to equalize supply and demand or ones that decrease discretion.

  • Issue Year: 55/2007
  • Issue No: 07
  • Page Range: 697-711
  • Page Count: 15
  • Language: Slovak