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How Business Community Institutions Can Help Fight Corruption

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Author(s)
Dixit, Avinash
Keywords
GOVERNMENT POLICIES
SCANDAL
LICENSE
INTERNATIONAL POLICY
SECURITIES
BRIBES
ANTICORRUPTION EFFORTS
ADJUDICATION
ACCOUNTING
INSTITUTION
COMMUNITY INSTITUTIONS
E-MAIL
MALFEASANCE
COMMUNICATION TECHNOLOGY
PENALTY
FINANCIAL INSTITUTIONS
COMPLAINTS
WEB PAGE
BANKS
OFFENSE
GOVERNMENT OFFICIALS
BRIBERY
CRIME
MATERIAL
BRIBE
DOMAIN
RESULT
INTERNATIONAL BUSINESS
FINANCIAL PERFORMANCE
POLICE
SANCTIONS
MEDIA
EXTORTION
LAW ENFORCEMENT
COMMUNITY ORGANIZATION
VICTIMS
CORRUPT OFFICIALS
TAXONOMY
FEASIBILITY
MAFIA
GLOBALIZATION
PUNISHMENT
INTEGRITY
LICENSE FEE
CONTACT INFORMATION
ANTICORRUPTION AGENCIES
BUSINESS COMMUNITY
PRISONERS
INNOVATIONS
CAPACITY BUILDING
CONFIDENCE
SUPPLIERS
PUBLIC OFFICIALS
LEGAL SYSTEM
PAYOFF
ANTICORRUPTION
BUSINESS ASSOCIATION
FIGURES
SANCTION
BUSINESSES
PDF
GOVERNANCE REFORM
BUSINESS LEADERSHIP
JOURNALISTS
CONVICTION
PENALTIES
WEB
REMEDIES
SCANDALS
POLITICIANS
TRANSPARENCY
AUCTION
SOCIAL SCIENCE
OPEN ACCESS
INNOVATION
COMPLAINT
CORRUPT
RECONSTRUCTION
WHISTLE-BLOWING
MARKETING
CORRUPTION
LEADERSHIP
LICENSES
RESULTS
BUSINESS OPPORTUNITIES
ECONOMIC DEVELOPMENT
ANTI-CORRUPTION
PAYOFFS
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URI
http://hdl.handle.net/20.500.12424/97861
Online Access
http://hdl.handle.net/10986/19371
Abstract
This paper considers the possibility of collective action by the business community to counter corruption in the award of government licenses and contracts. The analogy is with contract enforcement institutions studied by economic historians and contract law scholars. The institution in this context comprises a no-bribery norm, a community system to detect violations, and a multilateral ostracism penalty upon conviction in a community tribunal. The requirements such an institution must meet if it is to be effective are analyzed. It is shown that an institution of sufficient quality -- combining probability of correct detection and severity of punishment -- can eliminate bribery. If the private institution is not sufficiently good, then in conjunction with the state's formal apparatus it reduces the level of bribes demanded, but increases the probability of winning the license or contract through bribery. An improvement in the government's formal anti-corruption mechanism, holding the private institution constant, reduces both the level of bribes and the probability of success through bribery. The two institutions together are shown to achieve substantially better outcomes than either can on its own.
Date
2014-06
Identifier
oai:openknowledge.worldbank.org:10986/19371
http://hdl.handle.net/10986/19371
Copyright/License
CC BY 3.0 IGO
Collections
Corruption and Transparency Collection

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