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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 The Economic Journal, 108, (450), pp. 1381-1403. (doi:10.1111/1468-0297.00347).

Record type: Article


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.

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Published date: 1998
Organisations: Economics


Local EPrints ID: 33459
ISSN: 0013-0133
PURE UUID: ff2919aa-c99d-4700-a112-1fbf5770045b

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Date deposited: 22 Dec 2006
Last modified: 17 Jul 2017 15:52

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Author: Daron Acemoglu
Author: Thierry Verdier

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