Corruption, property rights and the allocation of talent: a general equilibrium approach
Acemoglu, Daron and Verdier, Thierry (1998) Corruption, property rights and the allocation of talent: a general equilibrium approach. Economic Journal, 108, (450), 1381-1403. (doi:10.1111/1468-0297.00347).
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We consider an economy where contracts are necessary to encourage investments. Contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes. We find that: (1) It may be optimal to allow some corruption and not enforce property rights fully. (2) Less developed economies may choose lower levels of property right enforcement and more corruption. (3) There may exist a 'free-lunch' such that over a certain range it is possible simultaneously to reduce corruption, increase investment, and achieve a better allocation of talent.
|Digital Object Identifier (DOI):||doi:10.1111/1468-0297.00347|
|Subjects:||H Social Sciences > HB Economic Theory
B Philosophy. Psychology. Religion > BJ Ethics
|Divisions:||University Structure - Pre August 2011 > School of Social Sciences > Economics
|Date Deposited:||22 Dec 2006|
|Last Modified:||31 Mar 2016 11:59|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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