Article (Scientific journals)
What Transparency Can Do When Incentives Fail: An Analysis of Rent Capture
Dabla-Norris, Era; Paul, Elisabeth
2006In IMF Working Paper, 06/146
Peer reviewed
 

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Keywords :
Principal-agent theory; Rent capture; Corruption
Abstract :
[en] This paper analyzes the pervasiveness and persistence of rent seeking, misgovernance, and public sector inefficiency in many developing and transition economies. We formalize evidence from country experiences and empirical studies into a stylized analytical framework that reflects realistic constraints faced in these countries. Our work departs from the standard economic literature by assuming that (i) the relationship between the government and its population is regulated through an implicit social consensus; (ii) traditional incentives (in the form of public expenditure controls, sanctions, or monetary incentives to perform) are, for various reasons, ineffective in many of these countries; and (iii) the persistence of high corruption reflects a very stable equilibrium, which in turn reflects the fact that several constraints are simultaneously binding. We argue that, when traditional incentives fail, transparency—information provision and disclosure, together with the means to use it—by relaxing different constraints, can contribute to improving public outcomes.
Disciplines :
Economic systems & public economics
General management, entrepreneurship & organizational theory
Author, co-author :
Dabla-Norris, Era
Paul, Elisabeth  ;  Université de Liège - ULiège > Institut des sciences humaines et sociales > Sociologie du développement
Language :
English
Title :
What Transparency Can Do When Incentives Fail: An Analysis of Rent Capture
Publication date :
2006
Journal title :
IMF Working Paper
Volume :
06/146
Peer reviewed :
Peer reviewed
Available on ORBi :
since 25 May 2010

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