CAOT 31 Lecture Notes - Lecture 14: Andrei Shleifer, Profit Maximization, Demand Curve
12 Oct 2020
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Document Summary
Corruption by andrei shleifer & robert w. vishny (1993) Two propositions about corruption: the structure of gov institutions and the political process are very important determinants of corruption. Weak gov which do not control their agencies would lead to ultra-high corruption levels. Illegality of corruption and the need for secrecy make it much more distortionary and costlier than taxation. This explains why in some less developed countries corruption is so high and so costly to development. Government corruption: sale by gov officials of gov property for personal gain. They charge personally for goods owned by the state to enable private agents to pursue economic activity through licenses, permits, passports, visas etc. In developing countries, it is a large fraction of gross national product. also common in developed countries. Most of them focus on principal-agent model relationship between the principal and the agent who takes the bribes from the private individuals. Studies examine ways of motivating agent to be honest.
