Corruption and Technology-Induced Private Sector Development

Author/Editor:

Jean-François Ruhashyankiko ; Etienne B Yehoue

Publication Date:

August 1, 2006

Electronic Access:

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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.

Series:

Working Paper No. 2006/198

Subject:

Corruption Foreign direct investment Labor share Public sector Technology

English

Publication Date:

August 1, 2006

ISBN/ISSN:

9781451864588/1018-5941

Stock No:

WPIEA2006198

Pages:

32

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