An efficient privatization mechanism

We consider the privatization of State-Owned Enterprises (SOEs) of which markets can be opened to competition once privatization takes place and competitors can compete successfully against them in a few years. The currently used “Revenue Maximization (RM)” scheme maximizes the government revenue from privatization but does not provide incentives for the privatized SOE to charge a price lower than the monopoly price until competition arises. We propose the “Welfare Maximization (WM)” scheme, which induces the privatized SOE to charge a competitive price without resorting to regulation. Also, WM provides greater incentives for post-privatization cost reduction.     

Partial privatization and yardstick competition

We analyse the dynamics of public and private sector employment in Bangladesh, using the natural experiment provided by the partial privatization of the jute industry. The public sector had substantial excess employment of workers initially, but this excess was substantially eroded by the end of the period we studied. The extent of erosion differs between white‐collar and manual worker categories, with excess employment persisting only in the former. Our findings suggest that partial privatization increases the efficacy of yardstick competition in the regulation of public firms, because heterogeneous ownership undermines collusion between public sector managers, and also makes excess employment more transparent to the general public.     

Causes of privatization in China

We test five hypotheses regarding the causes of privatization in China by using firm‐level panel data collected in 11 cities in the period 1995–2001. We have found that privatization is positively linked with hardened firm budgets and the extent of market liberalization, but is constrained by excessive debts and worker redundancy. Firm efficiency and state‐owned enterprises’ financial liabilities imposed on local governments are not factors of influence. These findings match the broad flow of events in China and highlight the role of market building in bringing about efficient institutional changes.     

Political objectives and privatization decisions

In early Romanian privatization a group of firms was explicitly banned from privatization. We use this institutional feature to test which factors contributed to the selection of firms for long‐term state ownership, and find that politicians sheltered from privatization large and inefficient firms which paid low wages and had high overdue payments. These results are consistent with minimization of employment losses, even if efficiency enhancement of privatization had to be sacrificed. We conjecture that the unfavourable economic conditions bringing large employment losses motivated Romanian politicians to fear the possible negative employment effects of privatization.     

Corruption and positive selection in privatization

We consider the supply of a public good based on a publicly owned facility. The Government has a choice between provision in-house and privatizing the facility and then outsourcing the production. In particular, we focus on corruption in the decision to privatize and on its effect on social welfare when there is asymmetric information on the public and private manager's efficiency. Our analysis shows that a corrupt Government, that chooses to privatize only in exchange for a bribe, makes a positive selection on the private firm's efficiency and, thus, may have a positive effect on social welfare.     

Corruption and military spending

Anecdotal evidence relates corruption with high levels of military spending. This paper tests empirically whether such a relationship exists. The empirical analysis is based on data from four different sources for up to 120 countries during 1985–1998. The association between military spending and corruption is investigated by using cross-section and panel regression techniques. The results suggest that corruption is associated with higher military spending as a share of both GDP and total government spending, as well as with arms procurement in relation to GDP and total government spending. The results can be interpreted as evidence that defense spending may be used as a component of an indicator of the quality of governance.     

Bribes vs. taxes: Market structure and incentives

Firms in low-income countries often avoid paying taxes by making informal payments to tax officials. To decrease these payments, we design an incentive scheme for business tax inspectors that rewards them according to the anonymous evaluation submitted by inspected firms. We show theoretically that incentives decrease the bribe amount, but make firms facing a more inelastic demand more attractive for inspectors. Attaching higher weights to the evaluation of smaller firms limits the scope for targeting. We evaluate both schemes in a field experiment in the Kyrgyz Republic. Our intervention reduces average business costs and prices, and increases tax revenues.     

Corruption and public spending on education and health

Existing country and regional studies show that the effect of corruption on public spending on health and education is mixed. This letter reveals that the effect of corruption on health and education spending is significant and non-linear in a panel of 134 countries observed over two decades: For an overwhelming majority of countries, corruption has a positive effect on the share of public resources spent on public health and a negative effect in the case of education. The results presented are robust to several econometric challenges ignored in the literature.     

On Corruption and Countervailing Actions in Three South Asian Nations

We argue that readily available data and information in newspaper stories enable one to discern the nature and patterns of corruption and to understand actions taken to combat corruption. We analyze and compare numerous newspaper reports of corruption in India, Sri Lanka, and Bangladesh. Using analysis derived from existing theory of corruption, we demonstrate how information in news accounts improves our understanding of corruption. Bangladesh had more coercive corruption, with countervailing actions dominated by direct actions of victims. In India and Sri Lanka, corruption was generally collusive, with countervailing actions on behalf of victims frequently leading to legal actions and investigative reports.     

Housing privatization in Romania

Over the past three decades, Romanian housing rights changed from a strictly managed public stock to one governed by individual decision‐making. And while it is typical that widespread private ownership provides a basis for a well‐functioning housing market, in Romania this has not been the case. Indeed, rather than creating a market that spontaneously allocates resources efficiently, housing privatization in Romania has created exclusion rights, thus creating an Anti‐commons problem. This problem can have effects similar to those of the tragedy of the Commons in which those who share a common good overuse it. In the Anti‐commons, in contrast, if too many owners have the right to exclude others from use of a resource, the resource is underused. In both cases, the rights allocation wastes resources.     

Corruption in public service delivery: An experimental analysis

To improve our understanding of corruption in service delivery, we use a newly designed game that allows us to investigate the effects of the institutional environment on the behavior of service providers and their monitors. We focus on the effect of four different factors: whether monitors are accountable to the service recipients, the degree of observability of service providers’ effort, the providers’ wages and the providers’ professional norms. In accordance with theory, we find that service providers perform better when monitors are elected by service recipients and when their effort is more easily observed. However, there is only weak evidence that service providers perform better when paid more. Monitors are more vigilant when elected and when service providers are paid more. Playing the game with Ethiopian nursing students, we also find that those with greater exposure to the Ethiopian public health sector perform less well, either as provider or as monitor, when the experiment is framed as a public health provision scenario, suggesting that experience and norms affect behavior.     

Corruption and public finance: an IMF perspective

Public finance should be a means whereby governments in low-income countries are able to increase economic growth and end poverty. Corruption, however, reduces tax revenue and makes public expenditure policies ineffective for achieving social objectives. The papers in this volume, which is sponsored by the Fiscal Affairs Department of the International Monetary Fund (IMF), describe how corruption makes public finance ineffective in promoting economic development.     

Corruption perceptions vs. corruption reality

This paper examines the accuracy of corruption perceptions by comparing Indonesian villagers' reported perceptions about corruption in a road-building project in their village with a more objective measure of ‘missing expenditures’ in the project. I find that villagers' reported perceptions do contain real information, and that villagers are sophisticated enough to distinguish between corruption in a particular road project and general corruption in the village. The magnitude of the reported information, however, is small, in part because officials hide corruption where it is hardest for villagers to detect. I also find that there are biases in reported perceptions. The findings illustrate the limitations of relying solely on corruption perceptions, whether in designing anti-corruption policies or in conducting empirical research on corruption.     

Corruption and Policy: Back to the Roots

Corruption is now recognized to be a pervasive phenomenon that can seriously jeopardize the best-intentioned reform efforts. This paper presents an analytical framework for examining the role basic market institutions play in rent-seeking and illicit behavior. The empirical results suggest that high barriers to new business entry and soft budget constraints on incumbent firms are particularly important institutional factors engendering opportunities for corruption. The findings also support the notion that economic development and maturation of democratic processes both temper corruption, as does, to a lesser extent, openness to international trade.     

国有企业改制效果的实证研究

本文通过对1998至2003年间全部国有企业和规模以上非国有企业的数据进行分析来研究我国国有企业改制的效果。我们不仅考察了改制对企业经济效益的影响,而且考察了改制对企业社会效益指标的影响。此外,我们还分析了改制影响经济效益的渠道、国有控股和非国有控股的差别、以及改制效果的可持续性。本文的主要发现是:改制后企业经济效益显著提高,并且主要来自于代理成本的降低,表现为管理费用率的下降;改制带来了一定的社会成本,但和国际经验相比程度不是很大;国有控股改制社会效益较好,而非国有控股改制经济效益较好;改制效果在一定期间内持续。     

道德文化、腐败与经济转型——对中国转型期一个基于道德腐败的经济学分析

在现有的经济学文献中 ,对腐败问题的讨论 ,规避道德文化的思路并不能令人满意地解释实际中存在的问题。本文建立了一个关于道德腐败的模型解释腐败活动猖獗的原因 ,并根据历史上成功经验和教训给出相应的政策建议。本文认为 ,个体的社会道德观念、行为在社会中相互影响。这样就可以建立一个动态的模型解释基于道德导致腐败规模变化的原因。本文最主要的结论是 :存在着一个“道德腐败陷阱”。从这一点出发 ,本文认为 ,从根本上有效抑制腐败单靠加强执法、加大对腐败的惩罚力度等传统的、事后的打击腐败措施是不够的 ,要制定和实施综合的反腐战略 ,其中关键是要建立一个全社会的事前监督、检举腐败的从国家到公民的“信誉机制”。     

清朝三代皇帝肃贪特点及所蕴含的管理思想

清朝康熙、雍正、嘉庆三位皇帝对肃贪问题有其基本认识和做法，从中可发现其所蕴含的系统管理思想和权变管理思想。从三代皇帝的肃贪中可得到以下启示：必须把肃贪当作一项系统工程来抓；在肃贪思想及方法上要树立权变思想；真正念好肃贪的“肃、扶、养、率”四字真经。这是肃贪必须解决的三个关键问题。     

Corruption and public debt: a cross-country analysis

Using data from a large panel of countries over the period 1995–2015, this article empirically investigates the effect of corruption on public debt. Overall, the estimates reveal that corruption increases public debt. The effect, however, appears to be heterogeneous across income-related sample splits: it is stronger for advanced economies, but weaker and less statistically robust for less-developed countries, where external factors such as foreign aid may also affect public debt. The analysis suggests the inadequacy of conventional wisdom assuming that more detrimental fiscal effects of corruption arise in low-income countries.     

Corruption and cross-border investment by multinational firms

Motivated by previous studies on the effect of corruption on foreign direct investment, we examine the impact of a distance measure of corruption between host and source countries on cross-border direct investment and find that corruption distance deters cross-border investment. The evidence indicates that corruption distance is not as serious a deterrent of outward direct investment from more-corrupt countries as it is from less-corrupt countries. We conclude that multinational firms with the capacity to engage in bribery can disregard this activity in transparent environments, whereas multinational firms accustomed to operating in transparent environments find it difficult to overcome the administrative complexities in corrupt environments. Journal of Comparative Economics 34 (4) (2006) 839–856.