Property Rights, Corruption and the Allocation of Talent: a General Equilibrium Approach

1998/09/01 by Daron Acemoğlu, Thierry Verdier · 1 voice · 2 citations
Social Sciences · Economics, Econometrics and Finance · #Experimental Behavioral Economics Studies #Economic theories and models #Corruption and Economic Development

paper · doi:10.1111/1468-0297.00347

openalex publication_date 1998/09/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/23

Abstract

We consider an economy where contracts are necessary to encourage investments. Contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes. We find that: (1) It may be optimal to allow some corruption and not enforce property rights fully. (2) Less developed economies may choose lower levels of property right enforcement and more corruption. (3) There may exist a ‘free‐lunch’ such that over a certain range it is possible simultaneously to reduce corruption, increase investment, and achieve a better allocation of talent.

Citations

• A Theory of Collective Reputations (with Applications to the Persistence of Corruption and to Firm Quality)
• Economic Development Through Bureaucratic Corruption

Cited by

• The Social Costs of Deregulation in a Fight Against Corruption: A Case Study on Driver’s Licenses in Mexico City
• The Colonial Origins of Comparative Development: An Empirical Investigation

Discussions

• Acemoglu in The Economic Journal #2/8: "Property Rights, Corruption and the Allocation of Talent: a General Equilibrium Approach" doi.org/10.1111/1468... [bsky, 0 points, 1 comments]