Controlling Corruption
Corruption is the method government officials implore to extract rents from businesses. This paper uses the functionalist-modernization theory of corruption to examine governmental corruption. The primary argument is that the functionalist-modernization approach is the most efficient method of controlling corruption. The market approach to corruption argues that corruption is inevitable in a modern economy. Since corruption cannot be eliminated, the market approach focuses on how to minimize its effect on a system? Before examining methods of limiting corruption, it is important to examine the principal-agent-client model of corruption. The principal-agent-client model of corruption is similar to the interaction between the government, politicians, and interest groups. The principle (the government) employs the agent (politicians), who in turn interacts with the client (interest groups). Figure 1 represents the interaction between the three parties Usually, the agent put his own interest ahead of the principle's interest. Consequently, the principle always monitors the agent's actions. The principle exchanges information with the agent, who in turn exchanges information with the client. Furthermore, the client pr
After examining corruption, we shift our attention back to controlling and minimizing its effect. Corruption (C) is defined as monopoly (M) plus discretion (D), minus accountability (A). In mathematical terms, C = M + D - A. To decrease corruption, the principal must do at least one out of three things: (1) decrease the possibility that a single agent can exercise a monopoly over the client, (2) increase the agent's accountability, or (3) decrease the agent's level of discretion The ideal amount of corruption in a system occurs when the cost of corruption is equal to the cost of removing the corruption. Figure 4 illustrates that the optimal amount of corruption occurs at q*, where the amount of money spent to eliminate corruption is equal to the amount of money the client offers the agent to be corrupt. His decision is influenced by weighing the payoffs associated with accepting the bribe against payoffs associated with rejecting the bribe. The game ends if the agent rejects the bribe. However, the agent usually accepts the bribe, because he gains nothing from rejecting it. Figure 3 illustrates the sub-game which occurs between the agent and the principal. The second approach increases the agent's accountability to the principal for being caught engaged in corrupt acts.
Some common words found in the essay are:
, similarly principal, level agents, model corruption, exchanges information, principal-agent-client model corruption, curtailing corruption, agent choose corrupt, iron triangle, bribe agent, corruption occurs, accepting bribe, payoffs associated,
Approximate Word count = 873
Approximate Pages = 3 (250 words per page double spaced)
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