Corruption and Technology-Induced Private Sector Development
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Summary:
This paper asks whether corruption might be the outcome of a lack of outside options for public officials or civil servants. We propose an occupational choice model embedded in an agency framework to address the issue. We show that technology-induced private sector expansion leads to a decline in publicly supplied corruption as it provides outside options to public officials who might otherwise engage in corruption. We provide empirical evidence that strongly shows that technology-induced private sector development is associated with a decline in aggregate corruption. This suggests that the decline in publicly supplied corruption outweighs the potential increase in privately supplied corruption that could result from private sector expansion.
Series:
Working Paper No. 2006/198
Subject:
Corruption Foreign direct investment Labor share Public sector Technology
English
Publication Date:
August 1, 2006
ISBN/ISSN:
9781451864588/1018-5941
Stock No:
WPIEA2006198
Pages:
32
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