Corruption and Technology-Induced Private Sector Development

32 Pages Posted: 3 Oct 2006

See all articles by Jean-François Ruhashyankiko

Jean-François Ruhashyankiko

International Monetary Fund (IMF); Abu Dhabi Investment Authority (ADIA); Harvard University

Etienne B. Yehoue

International Monetary Fund (IMF)

Date Written: August 2006

Abstract

This paper asks whether corruption might be the outcome of a lack of outside options for public officials or civil servants. We propose an occupational choice model embedded in an agency framework to address the issue. We show that technology-induced private sector expansion leads to a decline in publicly supplied corruption as it provides outside options to public officials who might otherwise engage in corruption. We provide empirical evidence that strongly shows that technology-induced private sector development is associated with a decline in aggregate corruption. This suggests that the decline in publicly supplied corruption outweighs the potential increase in privately supplied corruption that could result from private sector expansion.

Keywords: Corruption, Occupational choice, Technology, Private Sector Development

JEL Classification: D73, O3, J24

Suggested Citation

Ruhashyankiko, Jean-Francois and Yehoue, Etienne Baba, Corruption and Technology-Induced Private Sector Development (August 2006). IMF Working Paper No. 06/198, Available at SSRN: https://ssrn.com/abstract=934457

Jean-Francois Ruhashyankiko (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Abu Dhabi Investment Authority (ADIA) ( email )

211 Corniche Road
Abu Dhabi, Abu Dhabi PO Box3600
United Arab Emirates

Harvard University ( email )

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Cambridge, MA 02138
United States

Etienne Baba Yehoue

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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