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Corruption

NBER Working Paper No. w4372

26 Pages Posted: 24 Jan 2007 Last revised: 9 May 2012

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Robert W. Vishny

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: May 1993

Abstract

This paper presents two propositions about corruption. First, the structure of government institutions and the political process are a very important determinant of the level of corruption. In particular, weak governments which do not control their agencies would lead to ultra-high corruption levels. Second, the illegality of corruption and the need for secrecy make it much more distortionary and costly than its sister activity, taxation. These results may explain why in some less developed countries, corruption is so high and so costly to development.

Suggested Citation:

Shleifer, Andrei and Vishny, Robert W., Corruption (May 1993). NBER Working Paper No. w4372. Available at SSRN: https://ssrn.com/abstract=227027

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