Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/41062 
Year of Publication: 
2002
Series/Report no.: 
Diskussionsbeiträge No. 113
Publisher: 
Georg-August-Universität Göttingen, Volkswirtschaftliches Seminar, Göttingen
Abstract: 
Because corruption must be hidden from the public and is not enforced by courts it entails transaction costs, which are larger than those from legal exchange. This suggests that corrupt contracts are primarily relational contracts where legal exchange serves as a basis for sealing and enforcing corrupt agreements. Legal exchange not only provides for corrupt opportunities, but for the necessary enforcement mechanisms. Examples of such legal exchange are long-term business exchange, belonging to the same firm or political party or being embedded in social relationships. The latter may even comprise the engagement in charitable institutions. Reform should not only focus on limiting opportunities for corrupt behavior but also on impeding the enforcement of corrupt agreements.
Document Type: 
Working Paper

Files in This Item:
File
Size
176.71 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.