Publication: The Political Economy of Corruption : Causes and Consequences
This Note examines the opportunities for illicit gain that exist in all countries. It asks what factors determine the size and incidence of bribe payments and assesses the political, economic, and distributive consequences of corruption. Bribes are paid for two reasons--to obtain government benefits and to avoid costs. There is little evidence on how often officials, private firms, and individuals take advantage of corrupt opportunities and on how much money is paid in bribes. Surveys suggest that where corruption is endemic, it imposes a disproportionately high burden on the smallest firm. But, importantly, the most severe costs are often not the bribes themselves, but the underlying distortions they reveal. Despite the costs of widespread corruption, they are a symptom of disease, not the disease itself. Eliminating corruption makes no sense if the result is a rigid, unresponsive, autocratic government. Instead, anticorruption strategies should seek to improve the efficiency and fairness of government and to enhance the efficiency of the private sector.
“Rose-Ackerman, Susan. 1996. The Political Economy of Corruption : Causes and Consequences. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/a6e3215b-912f-52a8-ab12-5a6eeb410f4e License: CC BY 3.0 IGO.”
Other publications in this report series
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PublicationSmall Business Tax Regimes(World Bank, Washington, DC, 2016-02)Simplified tax regimes for micro and small enterprises in developing countries are intended to facilitate voluntary tax compliance. However, survey evidence suggests that small business taxation based on simplified bookkeeping or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels. Very simple fixed tax regimes not requiring any books or records tend to be overly popular but prone to abuse. System reforms will require more precise tailoring of the simplified regimes to their target beneficiaries, coupled with strong compliance management to detect and deter abuse. The overall objective of simplified taxation for micro and small enterprises (MSEs) in developing countries is generally to facilitate voluntary tax compliance and remove obstacles in moving toward business formalization and growth.
PublicationCompetition and Poverty(World Bank, Washington, DC, 2016-04)A literature review shows competition policy reforms can deliver benefits for the poorest households and improve income distribution. A lack of competition in food markets hurts the poorest households the most. Competition in input markets and between buyers helps farmers and small businesses. And more competitive markets bolster job growth over the longer term. More research is needed, however, to better understand the impact of competition reforms and antitrust enforcement on poverty and shared prosperity.