Corruption and Technology-Induced Private Sector Development

By Jean-François Ruhashyankiko, Etienne B Yehoue

August 1, 2006

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Format: Chicago

Jean-François Ruhashyankiko, and Etienne B Yehoue. Corruption and Technology-Induced Private Sector Development, (USA: International Monetary Fund, 2006) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Subject: Corruption, Foreign direct investment, Labor share, Public sector, Technology

Keywords: Economic development, Private sector development, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/198
Stock No:

WPIEA2006198
ISBN:

9781451864588
ISSN:

1018-5941

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