CHAPTER 10

WHY FIGHTING CORRUPTION REMAINS A LOSING BATTLE

Anwar Shah

10.1 INTRODUCTION: THE FIGHT AGAINST CORRUPTION REQUIRES A DEEPER UNDERSTANDING OF THE UNDERLYING MALAISE

10.2 CORRUPTION AND GOVERNANCE: FUNDAMENTAL CONCEPTS AND CONCERNS?

(a) The Many Forms of Corruption

10.3 WHAT DRIVES CORRUPTION?

(a) Conceptual Perspectives

(i) Principal-Agent Models

(ii) New Public Management Frameworks

(iii) Neo-Institutional Economics (NIE) Frameworks

(b) Empirical Perspectives

(i) How to Formulate a Strategy

(ii) Insights into Past Failures

10.4 CONCLUSIONS: DON'T USE THE "C" WORD

NOTES

REFERENCES

10.1 INTRODUCTION: THE FIGHT AGAINST CORRUPTION REQUIRES A DEEPER UNDERSTANDING OF THE UNDERLYING MALAISE

Statistics on corruption are often questionable, but available data suggest that it accounts for a significant proportion of economic activity worldwide.1 In Kenya, "questionable" public expenditures noted by the controller and auditor general in 1997 amounted to 7.6 percent of gross domestic product (GDP). In Latvia, a recent World Bank survey found that more than 40 percent of households and enterprises agreed that "corruption is a natural part of our lives and helps solve many problems." In Tanzania, service delivery survey data suggests that bribes paid to officials in the police, courts, tax services, and land offices amounted to 62 percent of official public expenditures in these areas. In the Philippines, the Commission on Audit estimates that $4 billion is diverted annually because ...

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