When competition corrupts : a theoretical analysis of market structure and the incidence of corruption

The paper develops a simple model to demonstrate that, paradoxically, greater competition may exacerbate the problem of corruption. Market participants engaging in corrupt practices enjoy lower production costs -- maybe because they pay a bribe to avoid installing the environmental safeguards required by law -- such that honest players are driven out of the market when the market becomes sufficiently competitive.

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Year of publication:	2013-09-01
Authors:	Basu, Kaushik ; McGavock, Tamara ; Zhang, Boyang
Institutions:	Economics Research, World Bank Group
Subject:	Public Sector Corruption&Anticorruption Measures \| Water and Industry \| Markets and Market Access \| Gender and Law \| Microfinance

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Extent:	application/pdf
Series:	Policy Research Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 6596
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010829436