Corruption has been a feature of public institutions for centuries yet only relatively recently has it been made the subject of sustained scientific analysis. Lambsdorff shows how insights from institutional economics can be used to develop a better understanding of why corruption occurs and the best policies to combat it. He argues that rather than being deterred by penalties, corrupt actors are more influenced by other factors such as the opportunism of their criminal counterparts and the danger of acquiring an unreliable reputation. This suggests a novel strategy for fighting corruption similar to the invisible hand that governs competitive markets. This strategy - the 'invisible foot' - shows that the unreliability of corrupt counterparts induces honesty and good governance even in the absence of good intentions. Combining theoretical research with state-of-the-art empirical investigations, this book will be an invaluable resource for researchers and policy-makers concerned with anti-corruption reform.
Acknowledgements; A roadmap to this book; 1. Introduction; 2. Enemies of corruption; 3. What is bad about bureaucratic corruption? An institutional economic approach; 4. The dilemma of the kleptocrat: what is bad about political corruption?; 5. Corruption and transactions costs: the rent-seeking perspective; 6. Making corrupt deals: contracting in the shadow of the law; 7. Exporters' ethics and the art of bribery; 8. How confidence facilitates illegal transactions: an empirical approach; 9. Corrupt relational contracting; 10. Concluding thoughts; Annex: Technical details to the Transparency International Corruption Perceptions Index; References; Index.
"...presents a novel and promising avenue for reducing corruption.... This volume's major strengths are the many examples of worldwide bribery that have been outed, and the many brief summaries of others' analyses of corruption." --Choice