Corruption and Technology-Induced Private Sector Development

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.
Publication date: August 2006
ISBN: 9781451864588
$18.00
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Government and Business , Occupational choice , Technology , Private Sector Development , public sector , state-owned enterprises , nationalization

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