Discussion Paper Details

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Title: Corruption and Competition

Author(s): Franklin Allen, Jun Qian and Lin Shen

Publication Date: October 2018

Keyword(s): Competition, Corruption, institutions, taxes and user fee

Programme Area(s): Development Economics, Financial Economics and Public Economics

Abstract: An interesting aspect of corruption is that its damaging effects on economic performance differ significantly across countries. In this paper, we show that if a central government collects sufficient taxes, it can curtail corruption by paying for performance of local government officials. An alternative way to reduce corruption is to introduce competition among local government officials. Difference in axing ability and the magnitude of competition among government officials can help explain the heterogenous effects of corruption across countries.

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Bibliographic Reference

Allen, F, Qian, J and Shen, L. 2018. 'Corruption and Competition'. London, Centre for Economic Policy Research.