Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/32018
Authors: 
Lambsdorff, Johann
Year of Publication: 
2001
Series/Report no.: 
CeGE Discussion Paper 9
Abstract: 
The objectives of government are pivotal to understanding the diverse negative effects of corruption on public welfare. Corruption renders governments unable or unwilling to maximize welfare. In the first case, it distorts agents' decisions and limits the contractual space available to agents and the government, acting as a benevolent principal. In the second case, a corrupt principal creates allocative inefficiencies, cripples its credible commitment to effective policies, and opens the door to opportunism.
Subjects: 
Corruption
welfare
principal-agent-theory
rent-seeking
x-inefficiency
kleptocracy
opportunism
JEL: 
D61
D72
K4
Document Type: 
Working Paper

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