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Corruption: Market Reform and Technology

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Institutional Dynamics and the Evolution of the Indian Economy

Abstract

Pro-market reforms and information and communication technology (ICT) are widely believed to be important instruments for enhancing efficiency. Our chapter asks a different question about these two instruments: how effective are they in fighting corruption? We suggest a typology of corruption, and argue that the type of corruption determines which of the instruments would be effective if at all, and to what extent. To make markets contestable and let them find equilibrium without intervention can reduce or eliminate certain types of corruption but not all. In some cases we need contributions from ICT. There are yet others where the two instruments should be used in a complementary way. Finally, some types of corruption are immune against both market reform and ICT.

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Notes

  1. Shleifer, A., & Vishny, R.W. (1993), “Corruption.” Quarterly Journal of Economics, 108: 3: 599–617.

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  2. Patibandla, M. (2006), Evolution of Markets and Institutions. Routledge: London.

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  3. Wade, R. (1988), Village Republics: Economic Conditions for Collective Action in South India. Cambridge/New York: Cambridge University Press.

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  4. Sanyal, A. (2000), “Audit Hierarchy in a Corrupt Tax Administration.” Journal of Comparative Economics, 28: 2, June: 364–378.

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  5. Scitovsky, T. (1942), “The Political Economy of Consumers’ Rationing.” Review of Economic Statistics, 24: 114–124.

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  6. Bribes extracted with the threat of delay have been analyzed in Sanyal, A. (2004) “Bribes in a Supply Line.” Economica, 71: 1, February: 155–168.

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  7. Wilson, J.Q. (1989), Bureaucracy. New York: Basic Books.

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  8. Dixit, A. (2005), Lawlessness and Economics: Alternative Modes of Governance. Princeton: Princeton University Press.

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Authors
  1. Murali Patibandla
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  2. Amal Sanyal
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Editor information

Editors and Affiliations

  1. Indian Institute of Management Bangalore, India

    Murali Patibandla (Professor) (Professor)

  2. University of Nottingham Business School, UK

    Rajesh Kumar (Associate Professor of International Business Strategy) (Associate Professor of International Business Strategy)

Copyright information

© 2009 A. Desai, R. Dossani, M.W. Hansen, R. Kumar, R. Lema, A. Okada, M. Patibandla, J.D. Pedersen, A. Roland, and A. Sanyal

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Cite this chapter

Patibandla, M., Sanyal, A. (2009). Corruption: Market Reform and Technology. In: Patibandla, M., Kumar, R. (eds) Institutional Dynamics and the Evolution of the Indian Economy. Palgrave Macmillan, New York. https://doi.org/10.1057/9780230620131_5

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