When Competition Corrupts : A Theoretical Analysis of Market Structure and the Incidence of Corruption
The paper develops a simple model to demonstrate that, paradoxically, greater competition may exacerbate the problem of corruption. Market participants engaging in corrupt practices enjoy lower production costs -- maybe because they pay a bribe to...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/09/18221190/competition-corrupts-theoretical-analysis-market-structure-incidence-corruption http://hdl.handle.net/10986/16047 |
| Summary: | The paper develops a simple model to
demonstrate that, paradoxically, greater competition may
exacerbate the problem of corruption. Market participants
engaging in corrupt practices enjoy lower production costs
-- maybe because they pay a bribe to avoid installing the
environmental safeguards required by law -- such that honest
players are driven out of the market when the market becomes
sufficiently competitive. |
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