Systemic corruption in the economy

Niels Rasmus Beckmann Stok

Student thesis: Master thesis

Abstract

In this study the reader will find an analysis of the players that engage in the game of corruption: Politicians, bureaucrats and businessmen. The analysis begins with a classical economic approach to understand the underlying incentives and constraints and derive an understanding of how and why the players engage in corruption. The rational agent analysis of the individual players is followed by an analysis in a game theoretic framework to understand how the corrupt actions are shaped and changed when the player takes the action of other players into consideration and a deepening of the understanding of the interactions between the three types of corrupt players is achieved. I then go on to subject the phenomenon of corruption an analysis based on cases to bridge the gap between theoretical findings and practical applications of corrupt behaviours. In doing so the analysis infringes upon the domain of political science to show how the democratic system is being used by a corrupt elite to generate large amounts of income from corruption all the while staying in power. This leads me to a discussion of the causalities of corruption in which I argue that businesses and especially politicians are the primary drivers of systemic corruption and that anti-corruption strategies based on economic arguments are conceptually right in their approach, but that in order for them to take effect it is crucial that economists make the corrupt politician an object of analysis that precedes the implementation of anti-corruption strategies. Based on this argument I propose the establishment of an International Anti- Corruption Board, and in conjunction with thinking from Economics and Corporate Governance I argue that such a constellation will help substantially in effectively implementing anti-corruption policies

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2011
Number of pages84