Changing the Rules vs. Breaking the Rules: Corruption in Rich and Poor Countries

by Collin Constantine

ABSTRACT

The paper develops a theoretical framework to analyze the perception of corruption in rich and poor countries. In the latter, markets are informally organized and function primarily through the interaction of informal groups. When social interactions in this context are compared to similar social behavior in developed countries — where markets operate mostly under formal arrangements — they are considered corrupt. This difference in perception originates solely from the different ways these societies are organized, which we show are underpinned by the differences in economic structures. The primary implication is that corruption indices essentially measure the extent of informal politico-socioeconomic interactions in rich and poor countries. When corruption is analyzed only as deviations from formal rules — poor countries are bound to be labelled as societies that ” break rules ” , while rich countries change rules to side step concerns over corruption. We show that production transformation and lower inequality can reduce the perception of corruption in less developed countries.

Changing the Rules vs. Breaking the Rules: Corruption in Rich and Poor Countries (PDF Download Available). Available from: https://www.researchgate.net/publication/299777816_Changing_the_Rules_vs_Breaking_the_Rules_Corruption_in_Rich_and_Poor_Countries [accessed Apr 12, 2016].

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