Edited by Bruce L. Benson and Paul R. Zimmerman
Chapter 9: The Economic Analysis of Corruption
Fred S. McChesney* Money don’t get everything it’s true But what it don’t get I can’t use I need money Money, lots of money All the mean green Yeah, that’s what I mean.1 INTRODUCTION2 Corruption is ubiquitous, not just in the world but also in the literature of law and social science. Economists have written prodigiously about the ‘problem’ of corruption, as have other social scientists. ‘The literature on corruption is both vast and diverse’ (Bowles, 2000, p. 462), and especially recently, the ‘number of articles and books being devoted to this subject has grown exponentially’ (Jain, 1998, p. vii). The literature on crime now is substantial, as various summaries and their bibliographies will attest (Benson and McChesney, 2004; Jain, 2001). Yet truly insightful analysis of corruption has not proceeded at the pace of the number of publications about corruption. A newcomer to the field, looking for the economic analysis of corruption, would come away disappointed. Economists write about corruption as just a sub-species of crime, rent-seeking and rent extraction, using already welldeveloped models from these general literatures. But economics has added little to the understanding of corruption specifically. This is not to say that the economic literature on corruption is not worth perusing. The very subject of corruption makes for interesting reading. Clandestine and concealed, corruption has a natural appeal to students of human behavior. Heavily laced with war stories involving actual corruption, the literature is a lot more fun to read than, say, economists’ disquisitions on production functions...
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