Response on Corruption-BECKER

A number of valuable points raised by the comments. To Li Huafang, yes you can use my blog entry on Chinese ownership. On neuroeconomics, it may be promising, but so far it has delivered almost nothing of value to an economist. But it is still a young field, and may do better in the future. I like the distinction between narrow power and general power. Narrow power might be more easily be corrupted. On the other hand, it may be easier to expose a corrupt use of narrow than of general power. I believe politicians are like most of the rest of us, and are mainly looking out for their own interests, broadly defined. That is why it is necessary to have a competitive political process and competitive media to keep politicians in check. This issue goes back to Edmund Burke, and perhaps earlier. By the way, I do not believe the Rockefellers, Corzines, Bloombergs, Perots, etc are more praiseworthy political figures than many others who are much poorer. Rich politicians also want to be elected, and cater to various political interests. But I agree very rich politicians are less likely to take bribes. I do believe the evidence is that better paid officials are less corrupt. Rank both corruption and the pay of officials (relative to the average in their countries). I believe the correlation between these ranks would be strongly negative, although I have not seen such an approach carefully done. I like the comment that bad laws that induce widespread corruption may have a very negative effect on basic values. The former Soviet Union may illustrate this. But it is still true that these countries would have been devastated if all these laws were followed exactly. To take a different example, it is unfortunate that many American cities have numerous ridiculous laws concerning materials, etc to be used for construction. Yet without corruption that enables builders to get around these laws, construction would come to a virtual halt in many large cities like Chicago. Unfortunately, they may also corrupt officials to ignore valuable building laws! One does not have to know who to bribe in order to engage indirectly in bribery. Some people pay lawyers to take care of their traffic tickets. They do not bribe the lawyers, but the lawyers might bribe officials. Honest persons may be at a disadvantage compared to corrupt persons if the latter bribe officials to overlook bad (or good) laws. So industries where corruption has great value will come to be dominated by individuals willing to corrupt officials. This happened during prohibition where the liquor industry became dominated by gangsters- it is happening now with respect to illegal drugs.

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