Seeds of Corruption : Do Market Institutions Matter?
Ten years into the transition, corruption is so pervasive that it could jeopardize the best-intentioned reform efforts. The authors present an analytical framework for examining the role market institutions play in rent-seeking and illicit behavior...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/06/437225/seeds-corruption-market-institutions-matter http://hdl.handle.net/10986/19833 |
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okr-10986-19833 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ACCOUNTABILITY ACTIONS ALLOCATION OF RESOURCES ANTI-COMPETITIVE CONDUCT ASSET MANAGEMENT AUTHORITY BANKING SYSTEM BANKRUPTCY BARRIERS TO ENTRY BUSINESS ENVIRONMENT CABINET CENTRAL PLANNING COLLUSION COMPETITION POLICY COMPETITIVENESS CONFLICT OF INTERESTS CONSUMERS CONVENTIONAL WISDOM CORPORATE GOVERNANCE CORRUPTION COURT PROCEDURES CPI DECISION-MAKING DECREE DEGREE OF CORRUPTION DEVELOPMENT AGENCIES DISCLOSURE DISECONOMIES DISECONOMIES OF SCALE ECONOMIC DEVELOPMENT ECONOMIC REGULATIONS ECONOMISTS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ETHICAL STANDARDS FINANCIAL AUDITS FINANCIAL CONTROL FISCAL FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS FOREIGN TRADE FRAUD GDP GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT AGENCIES GOVERNMENT DECISION GOVERNMENT EFFORTS GOVERNMENT OFFICIALS HARD BUDGET CONSTRAINTS IMPORTS INCOME INDUSTRIALIZATION INHERITANCE INSOLVENCY INSOLVENCY LAW INSOLVENCY LAWS INSOLVENT INSTITUTIONAL DEVELOPMENT INSTITUTIONAL REFORM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE INVESTMENT CLIMATE JUDICIARY LAW INDEX LEGAL FRAMEWORK LEGAL SYSTEM LEGISLATION LEGISLATURE LEVELS OF GOVERNMENT LOBBYING LOCAL LEVELS MARKET ECONOMY MARKET POWER MARKET PRICES MERGERS MERITOCRACY MONOPOLIES MONOPOLY NATURAL MONOPOLY OIL OLIGOPOLY PLANNED ECONOMIES POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL POWER POLITICIANS PREDATORY PRICING PRICE FIXING PRIVATE SECTOR INVOLVEMENT PRIVATIZATION PRODUCERS PUBLIC HEARINGS PUBLIC OFFICIALS QUOTAS REGULATORY CAPTURE REGULATORY OVERSIGHT REGULATORY REGIME REGULATORY REGIMES REGULATORY SYSTEMS RENT-SEEKING BEHAVIOR REPRESENTATIVES SOCIAL STABILITY SOFT BUDGET CONSTRAINTS STATE ENTERPRISES STATE OWNERSHIP STATE PROCUREMENT STATE-OWNED ENTERPRISES STATISTICAL ANALYSIS TAX ARREARS TRANSITION ECONOMIES TRANSPARENCY UNOBSERVED COMPONENTS MODEL |
| spellingShingle |
ACCOUNTABILITY ACTIONS ALLOCATION OF RESOURCES ANTI-COMPETITIVE CONDUCT ASSET MANAGEMENT AUTHORITY BANKING SYSTEM BANKRUPTCY BARRIERS TO ENTRY BUSINESS ENVIRONMENT CABINET CENTRAL PLANNING COLLUSION COMPETITION POLICY COMPETITIVENESS CONFLICT OF INTERESTS CONSUMERS CONVENTIONAL WISDOM CORPORATE GOVERNANCE CORRUPTION COURT PROCEDURES CPI DECISION-MAKING DECREE DEGREE OF CORRUPTION DEVELOPMENT AGENCIES DISCLOSURE DISECONOMIES DISECONOMIES OF SCALE ECONOMIC DEVELOPMENT ECONOMIC REGULATIONS ECONOMISTS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ETHICAL STANDARDS FINANCIAL AUDITS FINANCIAL CONTROL FISCAL FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS FOREIGN TRADE FRAUD GDP GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT AGENCIES GOVERNMENT DECISION GOVERNMENT EFFORTS GOVERNMENT OFFICIALS HARD BUDGET CONSTRAINTS IMPORTS INCOME INDUSTRIALIZATION INHERITANCE INSOLVENCY INSOLVENCY LAW INSOLVENCY LAWS INSOLVENT INSTITUTIONAL DEVELOPMENT INSTITUTIONAL REFORM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE INVESTMENT CLIMATE JUDICIARY LAW INDEX LEGAL FRAMEWORK LEGAL SYSTEM LEGISLATION LEGISLATURE LEVELS OF GOVERNMENT LOBBYING LOCAL LEVELS MARKET ECONOMY MARKET POWER MARKET PRICES MERGERS MERITOCRACY MONOPOLIES MONOPOLY NATURAL MONOPOLY OIL OLIGOPOLY PLANNED ECONOMIES POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL POWER POLITICIANS PREDATORY PRICING PRICE FIXING PRIVATE SECTOR INVOLVEMENT PRIVATIZATION PRODUCERS PUBLIC HEARINGS PUBLIC OFFICIALS QUOTAS REGULATORY CAPTURE REGULATORY OVERSIGHT REGULATORY REGIME REGULATORY REGIMES REGULATORY SYSTEMS RENT-SEEKING BEHAVIOR REPRESENTATIVES SOCIAL STABILITY SOFT BUDGET CONSTRAINTS STATE ENTERPRISES STATE OWNERSHIP STATE PROCUREMENT STATE-OWNED ENTERPRISES STATISTICAL ANALYSIS TAX ARREARS TRANSITION ECONOMIES TRANSPARENCY UNOBSERVED COMPONENTS MODEL Broadman, Harry G. Recanatini, Francesca Seeds of Corruption : Do Market Institutions Matter? |
| relation |
Policy Research Working Paper;No. 2368 |
| description |
Ten years into the transition,
corruption is so pervasive that it could jeopardize the
best-intentioned reform efforts. The authors present an
analytical framework for examining the role market
institutions play in rent-seeking and illicit behavior.
Using recently available data on the incidence of
corruption, and on institutional development, they provide
preliminary evidence on the link between the development of
market institutions, and incentives for corruption.
Virtually all of the indicators they examine appear to be
important, but three are statistically significant: 1) the
intensity of barriers to the entry of new business. 2) The
effectiveness of the legal system. 3) The efficacy and
competitiveness of services provided by infrastructure
monopolies. The main lesson emerging from their analysis: a
well established system of market institutions - clear and
transparent rules, fully functioning checks and balances
(including strong enforcement mechanisms), and a robust
competitive environment - reduces opportunities for
rent-seeking and hence incentives for corruption. Both the
design, and effective implementation of such measures are
important if a market system is to be effective. It is not
enough, for example, to enact first-rate laws if they are
not enforced. The local political economy greatly affects
whether a given policy reform will curtail corruption.
Especially important are the following factors in the
political economy: a) the credibility of the
government's commitment to carrying out announced
reforms. B) The degree to which government officials are
captured by the entities they regulate or oversee. C) the
stability of the government itself. D) The political power
of entrenched vested interests. Economists in the field of
industrial organization, antitrust, and regulation have long
recognized these factors as potent determinants of
opportunistic behavior, corruption, and "capture"
of government officials. Only now are they becoming
conventional wisdom among specialists in economies in transition. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Broadman, Harry G. Recanatini, Francesca |
| author_facet |
Broadman, Harry G. Recanatini, Francesca |
| author_sort |
Broadman, Harry G. |
| title |
Seeds of Corruption : Do Market Institutions Matter? |
| title_short |
Seeds of Corruption : Do Market Institutions Matter? |
| title_full |
Seeds of Corruption : Do Market Institutions Matter? |
| title_fullStr |
Seeds of Corruption : Do Market Institutions Matter? |
| title_full_unstemmed |
Seeds of Corruption : Do Market Institutions Matter? |
| title_sort |
seeds of corruption : do market institutions matter? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/06/437225/seeds-corruption-market-institutions-matter http://hdl.handle.net/10986/19833 |
| _version_ |
1764441523309510656 |
| spelling |
okr-10986-198332021-04-23T14:03:46Z Seeds of Corruption : Do Market Institutions Matter? Broadman, Harry G. Recanatini, Francesca ACCOUNTABILITY ACTIONS ALLOCATION OF RESOURCES ANTI-COMPETITIVE CONDUCT ASSET MANAGEMENT AUTHORITY BANKING SYSTEM BANKRUPTCY BARRIERS TO ENTRY BUSINESS ENVIRONMENT CABINET CENTRAL PLANNING COLLUSION COMPETITION POLICY COMPETITIVENESS CONFLICT OF INTERESTS CONSUMERS CONVENTIONAL WISDOM CORPORATE GOVERNANCE CORRUPTION COURT PROCEDURES CPI DECISION-MAKING DECREE DEGREE OF CORRUPTION DEVELOPMENT AGENCIES DISCLOSURE DISECONOMIES DISECONOMIES OF SCALE ECONOMIC DEVELOPMENT ECONOMIC REGULATIONS ECONOMISTS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ETHICAL STANDARDS FINANCIAL AUDITS FINANCIAL CONTROL FISCAL FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTORS FOREIGN TRADE FRAUD GDP GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT AGENCIES GOVERNMENT DECISION GOVERNMENT EFFORTS GOVERNMENT OFFICIALS HARD BUDGET CONSTRAINTS IMPORTS INCOME INDUSTRIALIZATION INHERITANCE INSOLVENCY INSOLVENCY LAW INSOLVENCY LAWS INSOLVENT INSTITUTIONAL DEVELOPMENT INSTITUTIONAL REFORM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE INVESTMENT CLIMATE JUDICIARY LAW INDEX LEGAL FRAMEWORK LEGAL SYSTEM LEGISLATION LEGISLATURE LEVELS OF GOVERNMENT LOBBYING LOCAL LEVELS MARKET ECONOMY MARKET POWER MARKET PRICES MERGERS MERITOCRACY MONOPOLIES MONOPOLY NATURAL MONOPOLY OIL OLIGOPOLY PLANNED ECONOMIES POLICY INSTRUMENTS POLICY MAKERS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICAL POWER POLITICIANS PREDATORY PRICING PRICE FIXING PRIVATE SECTOR INVOLVEMENT PRIVATIZATION PRODUCERS PUBLIC HEARINGS PUBLIC OFFICIALS QUOTAS REGULATORY CAPTURE REGULATORY OVERSIGHT REGULATORY REGIME REGULATORY REGIMES REGULATORY SYSTEMS RENT-SEEKING BEHAVIOR REPRESENTATIVES SOCIAL STABILITY SOFT BUDGET CONSTRAINTS STATE ENTERPRISES STATE OWNERSHIP STATE PROCUREMENT STATE-OWNED ENTERPRISES STATISTICAL ANALYSIS TAX ARREARS TRANSITION ECONOMIES TRANSPARENCY UNOBSERVED COMPONENTS MODEL Ten years into the transition, corruption is so pervasive that it could jeopardize the best-intentioned reform efforts. The authors present an analytical framework for examining the role market institutions play in rent-seeking and illicit behavior. Using recently available data on the incidence of corruption, and on institutional development, they provide preliminary evidence on the link between the development of market institutions, and incentives for corruption. Virtually all of the indicators they examine appear to be important, but three are statistically significant: 1) the intensity of barriers to the entry of new business. 2) The effectiveness of the legal system. 3) The efficacy and competitiveness of services provided by infrastructure monopolies. The main lesson emerging from their analysis: a well established system of market institutions - clear and transparent rules, fully functioning checks and balances (including strong enforcement mechanisms), and a robust competitive environment - reduces opportunities for rent-seeking and hence incentives for corruption. Both the design, and effective implementation of such measures are important if a market system is to be effective. It is not enough, for example, to enact first-rate laws if they are not enforced. The local political economy greatly affects whether a given policy reform will curtail corruption. Especially important are the following factors in the political economy: a) the credibility of the government's commitment to carrying out announced reforms. B) The degree to which government officials are captured by the entities they regulate or oversee. C) the stability of the government itself. D) The political power of entrenched vested interests. Economists in the field of industrial organization, antitrust, and regulation have long recognized these factors as potent determinants of opportunistic behavior, corruption, and "capture" of government officials. Only now are they becoming conventional wisdom among specialists in economies in transition. 2014-08-28T18:26:04Z 2014-08-28T18:26:04Z 2000-06 http://documents.worldbank.org/curated/en/2000/06/437225/seeds-corruption-market-institutions-matter http://hdl.handle.net/10986/19833 English en_US Policy Research Working Paper;No. 2368 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |