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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 13, Issue 2 (Jun 2013)

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What is the Contribution of the Theory of Redistribution Systems to the Theory of Corruption?

Tomáš Otáhal
  • Corresponding author
  • Department of Economics, FBE MENDELU in Brno, Zemědělská 1, 613 00 Brno, Czech Republic
  • Email:
/ Milan Palát
  • Corresponding author
  • Department of Territorial Studies, Faculty of Regional Development and International Studies, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic
  • Email:
/ Petr Wawrosz
  • Corresponding author
  • The University of Finance and Administration, Faculty of Economic Studies, Estonská 500, 101 00 Prague 10
  • Email:
Published Online: 2013-07-09 | DOI: https://doi.org/10.2478/revecp-2013-0003

Abstract

Scholars making economic policy recommendations to resolve corruption problem use several approaches, the most dominant of which are the principal-agent and rent-seeking theories. In this paper, we argue that the principal-agent theory has problems to account for the environment in which the agents offering and accepting corruption operate, and explain the importance of agents for survival of their environment. The rent-seeking theory, on the other hand, finds it difficult to establish socially effective legislation and ways to determine the barriers to entry that motivate agents to behave corruptly. Both problems, however, are vital for solving the problem of corruption. Lacking the knowledge of the agent’s environment (system) and their significance for survival of the system, the theory cannot define incentives that would discourage the agent from acting in a corrupted way. If the rent-seeking theory does not determine the barriers to entry that motivate agents to behave corruptly, it cannot determine the proper legislation that would deter corrupt behaviour and lead to economic development. For these reasons we investigate if both problems can be explained and solved within the alternative theory of redistribution systems and its part - the theory of parallel redistribution games.

Keywords : Corruption; redistribution system; parallel redistribution game; game theory

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About the article

This article is a result of the research project supported by the Ministry of Education, Youth and Sports of the Czech Republic, no. VZ 6214648904 The Czech Economy in the Process of Integration and Globalization, and the Development of the Agricultural Sector and the Sector of Services under the New Conditions of the Integrated European Market”, thematic area 01 ”Macroeconomic and microeconomic performance of the Czech economy, and the Czech government’s economic-political measures in the context of the integrated European market”. An earlier draft of the paper was presented at Modern and Current Trends in the Public Sector Research Conference held in Šlapanice (Faculty of Economics and Administration, Masaryk University) in 2012. We would like to thank Ing. Marek Pavlík, Ph.D., from the Faculty of Economics and Administration of Masaryk University, and other participants for valuable comments on this project. Special thanks must be expressed to two anonymous reviewers of our article for their remarks who helped us more precisely explain our ideas and give us direction for the further research


Published Online: 2013-07-09

Published in Print: 2013-06-01


Citation Information: Review of Economic Perspectives, ISSN (Online) 1804-1663, ISSN (Print) 1213-2446, DOI: https://doi.org/10.2478/revecp-2013-0003.

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