“Bad” corruption

It seems that people around the world have come to accept corruption as a given.  In fact there are multiple definitions of what is “good” vs. “bad” corruption.

This from the freakonomics blog in the NYT:

Ray Fisman, writing in Foreign Policy, explains that some types of corruption are better than others: “In an orderly, predictable — yet corrupt — system, businesses can at least calculate expected returns and plan accordingly.  Paying bribes to an unstable or unpredictable government, on the other hand, requires a leap of faith and a quick exit strategy.” Viewed in this light, the recent Rio Tinto trial in China may actually be bad for business as “it might be signaling to foreigners that they are entering a new era of uncertainty over the rules that govern their interactions with Chinese bureaucrats.”

It turns out that the Economics of Corruption is actually a study in itself.

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