CORRUPTION - 2

Sometimes one invokes legality and
almost interchangeably uses the word
“corrupt” and “illicit” in describing a
transaction. But just as clearly not all
illegal transactions are corrupt, nor are
all instances of corruption or bribery illegal1
(as when you tip the maitre d’ to
get a better table at a restaurant than
other customers, or in the much more
important cases of gift-giving by lobbyists
to politicians, campaign contributions
to Political Action Committees, or
post-retirement jobs in private firms to

bureaucrats of agencies meant to regulate
them). Similarly, one should keep a
distinction between “immoral” and
“corrupt” transactions. When you pay a
blackmailer, you may consider him immoral,
but you are paying to stop him
from revealing some information which
may be unpleasant for you but which
may be neither illegal nor corrupt. On
the other hand, one can think of instances
of corruption and bribery which
some people may not regard as immoral
(particularly those for whom end justifies
means), as when you bribe a policeman
not to torture a suspect. Having
referred to these alternative meanings
of even economic corruption, let me
state that in this paper I shall mostly
confine myself to the application of
this term to imply the use of public
office for private gain or the agency
problem referred to in the preceding
paragraph.


Even with this common use of the
term among economists, there are many
ambiguities. Does striving for private
gain include policies that are primarily
oriented to increasing the chances for
remaining in office? The distinction between
political and economic corruption
can get blurred here. Then there
are problems in common comparative
use of the term in the obvious absence
of any publicly available objective measures.
A particular African country may
be in some sense more corrupt than a
particular East Asian country, even
though the actual amount of bribe
money exchanging hands may be much
larger in the latter; this may be simply
because rampant corruption may have
choked off large parts of economic
transactions in the former. Then there
are cases where the bribe per unit of
transaction (and the consequent inefficiency)
may be higher (in the case of
decentralized corruption, as we shall
note later) than in situations of central-

ized (“one-stop shopping”) corruption
where the inefficiency may be less,
even though the total amount of bribe
paid may be larger.