Routledge Dictionary of Economics, Second Edition
The use of public office for private gain by the political establishment, bureaucrats or legislators. Its different forms include accepting bribes to change decisions, fraud, LAUNDERING MONEY and BLACK MARKET Operations. Corruption increases TRANSACTION COSTS and the final cost of many goods and services, especially where a government licence is needed.
Although it can discourage foreign investors, it does make some economic systems work faster.
References
Elliott, K.A. (ed.) (1997) Corruption and the Global Economy, Washington, DC: Institute for International Economics.
Treisman, D. (2000) ‘The causes of corruption: a cross-national study’, Journal of Public Economics 76:399–457.
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