Journal of Business Ethics

, Volume 119, Issue 3, pp 399–404 | Cite as

Mises, Hayek and Corruption

  • Tomáš Otáhal


Using the arguments of Ludwig von Mises and Friedrich August von Hayek, I argue that private ownership solves the economic problem of corruption. Since private ownership discourages entrepreneurs from rent-seeking, and privately owned media provide objective and unbiased information to citizens, any legal reform establishing and enforcement of private ownership also solves the corruption problem.


Austrian school Corruption Economic calculation Rent-seeking 



This article is the result of research project supported by the Ministry of Education, Youth and Sports of the Czech Republic No. VZ 6214648904 “The Czech Economy in the Process of Integration and Globalization, and the Development of Agricultural Sector and the Sector of Services under the New Conditions of the Integrated European Market,” thematic area 01 “Macroeconomic and microeconomic performance of the Czech economy, and the Czech government’s econo-political measures in the context of the integrated European market.” The submission was highly inspired by Dr. Libor Dušek from CERGE-EI. I would like to thank the anonymous referees for their comments that help improve the manuscript, and also Katarína Lexová from NEWTON College for editing.


  1. Becker, G. S. (1983). A theory of competition among pressure groups for political influence. Quarterly Journal of Economics, 98(3), 371–400.CrossRefGoogle Scholar
  2. Bjorvatn, K., & Søreide, T. (2005). Corruption and privatization. European Journal of Political Economy, 21(4), 903–914.CrossRefGoogle Scholar
  3. Boettke, P. (1993). Why perestroika failed: The politics and economics of socialist transformation. London and New York: Rutledge.CrossRefGoogle Scholar
  4. Brunetti, A., & Weder, B. (2003). A free press is bad news for corruption. Journal of Public Economics, 87(7–8), 1801–1824.CrossRefGoogle Scholar
  5. Buchanan, J. M., & Tullock, G. (1962). The calculus of consent. Ann Arbor: University of Michigan Press.Google Scholar
  6. Budínský, P., & Valenčík, R. (2009a). Applications of theory of redistribution systems to analysis competitivity. Ekonomický časopis, 57(3), 291–306.Google Scholar
  7. Budínský, P., & Valenčík, R. (2009b). Teorie redistribučních systémů. Politická ekonomie, 57(5), 644–659.Google Scholar
  8. Choi, J. P., & Thum, M. (2004). The economics of repeated extortion. RAND Journal of Economics, 35(2), 203–223.CrossRefGoogle Scholar
  9. Clarke, G. R. G., & Xu, L. C. (2004). Privatization, competition, and corruption: How characteristics of bribe takers and payers affect bribes to utilities. Journal of Public Economics, 88(9–10), 2067–2097.CrossRefGoogle Scholar
  10. Coase, R. (1988). The firm the market and the law. Chicago, IL: University of Chicago Press.Google Scholar
  11. Colombatto, E. (2003). Why is corruption tolerated? Review of Austrian Economics, 16(4), 367–379.CrossRefGoogle Scholar
  12. Coyne, C. (2008). After war: The political economy of exporting democracy. Stanford, CA: Stanford University Press.Google Scholar
  13. De Soto, H. (1989). The other path: The invisible revolution in the third world. New York: Harper & Row.Google Scholar
  14. Djankov, S., Glaeser, E., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2003). The new comparative economics. Journal of Comparative Economics, 31(4), 595–619.CrossRefGoogle Scholar
  15. Fisman, R., & Miguel, E. (2007). Corruption, norms, and legal enforcement: Evidence from diplomatic parking tickets. Journal of Political Economy, 115(6), 1020–1048.CrossRefGoogle Scholar
  16. Harstad, B., & Svensson, J. (2011). Bribes, lobbying and development. American Political Science Review, 105(1), 1–18.CrossRefGoogle Scholar
  17. Hay, J. R., & Shleifer, A. (1998). Private enforcement of public laws: A theory of legal reform. American Economic Review: Papers and Proceedings, 88(2), 398–403.Google Scholar
  18. Hayek, F. A. V. (1960). The constitution of Liberty. Chicago, IL: University of Chicago Press.Google Scholar
  19. Hayek, F. A. V. (1980). Individualism and economic order. Chicago, IL: University of Chicago Press.Google Scholar
  20. Heidenheimer, A. J., Johnston, M., & LeVine, V. T. (1999). Political corruption: A Handbook. New Brunswick, NJ: Transaction Publishers.Google Scholar
  21. Huntington, S. P. (1965). Political development and political decay. World Politics, 17(3), 386–430.CrossRefGoogle Scholar
  22. Kaufmann, D., & Siegelbaum, P. (1996). Privatization and corruption in transition economies. Journal of International Affairs, 50(2), 419–458.Google Scholar
  23. Kirzner, I. M. (1985). Discovery and capitalist process. London and Chicago: The University of Chicago Press.Google Scholar
  24. Koyuncu, C., Ozturkler, H., & Yilmaz, R. (2010). Privatization and corruption in transition economies: A panel study. Journal of Economic Policy Reform, 13(3), 277–284.CrossRefGoogle Scholar
  25. Krueger, A. O. (1974). The Political economy of the rent-seeking society. American Economic Review, 64(3), 291–303.Google Scholar
  26. Lambsdorf, J. G. (2002). Corruption and rent-seeking. Public Choice, 113(1–2), 97–125.CrossRefGoogle Scholar
  27. Lambsdorff, J. G. (2007). The institutional economics of corruption and reform: Theory, evidence, and policy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  28. Leeson, P. (2008). Media freedom, political knowledge, and participation. Journal of Economic Perspectives, 22(2), 155–169.CrossRefGoogle Scholar
  29. Leff, N. H. (1964). Economic development through bureaucratic corruption. American Behavioral Scientist, 8(3), 8–14.CrossRefGoogle Scholar
  30. Martimort, D., & Straub, S. (2009). Infrastructure privatization and changes in corruption patterns: The roots of public discontent. Journal of Development Economics, 90(1), 69–84.CrossRefGoogle Scholar
  31. Mises, L. V. (1990). Economic calculation in the socialist commonwealth: A treatise on economics. Auburn, AL: Ludwig von Mises Institute.Google Scholar
  32. Mises, L. V. (1996). Human action: A treatise on economics. San Francisco, CA: Foundation for Economic Education, Inc.Google Scholar
  33. Murphy, K. M., Shleifer, A., & Vishny, R. (1991). The allocation of talent: The implications for growth. Quarterly Journal of Economics, 106(2), 503–530.CrossRefGoogle Scholar
  34. Murphy, K. M., Shleifer, A., & Vishny, R. (1993). Why is rent-seeking so costly for growth? American Economic Review: Papers and Proceedings, 83(2), 409–414.Google Scholar
  35. North, D. C., Wallis, J. J., & Weingast, B. R. (2009). Violence and social order: A conceptual framework for interpreting recorded human history. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  36. Otáhal, T. (2007). Why is corruption a problem of the state? Prague Economic Papers, 7(2), 165–179.Google Scholar
  37. Otáhal, T. (2008a). Na obranu dobývání renty. Ekonomický časopis, 56(10), 1019–1032.Google Scholar
  38. Otáhal, T. (2008b). Teorie podnikatelského objevování. Politická ekonomie, 56(5), 669–683.Google Scholar
  39. Reinikka, R., & Svensson, J. (2004). The Power of Information: Evidence from Newspaper Campaign to Reduce Capture. World Bank Policy Research Paper No. 3239. Google Scholar
  40. Rose-Ackerman, S. (1999). Corruption and government: Causes, consequences, and reform. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  41. Shleifer, A., & Vishny, R. W. (1993). Corruption. Quarterly Journal of Economics, 10(3), 519–617.Google Scholar
  42. Svensson, J. (2005). Eight questions about corruption. Journal of Economic Perspectives, 19(3), 19–42.CrossRefGoogle Scholar
  43. Treisman, D. (2000). The causes of corruption: A cross-national study. Journal of Public Economics, 76(3), 399–457.CrossRefGoogle Scholar
  44. Tullock, G. (1967). The welfare costs of tariffs, monopolies and theft. Western Economic Journal, 5(3), 224–232.Google Scholar
  45. Tullock, G. (1996). Corruption theory and practice. Contemporary Economic Policy, 14(3), 6–13.CrossRefGoogle Scholar
  46. Wallis, J. J. (2004). The Concept of Systematic Corruption in American Political and Economic History. NBER Working Paper 10952.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Department of EconomicsFBE MENDELU in BrnoBrnoThe Czech Republic

Personalised recommendations