tag:blogger.com,1999:blog-6436195628042715004.post1750550071204177505..comments2023-09-05T03:01:03.270-07:00Comments on Business Economist: Corruption and bribesUrsula Sprukhttp://www.blogger.com/profile/09989030899817531494noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6436195628042715004.post-138495127494538792012-09-30T23:36:50.564-07:002012-09-30T23:36:50.564-07:00This comment has been removed by the author.Alberthttps://www.blogger.com/profile/03644134494161593090noreply@blogger.comtag:blogger.com,1999:blog-6436195628042715004.post-12334610748774502222010-12-15T01:47:04.901-08:002010-12-15T01:47:04.901-08:00Thanks Ursula. I hope you write more on this topic...Thanks Ursula. I hope you write more on this topic in future.Winton Bateshttps://www.blogger.com/profile/07383561940886657594noreply@blogger.comtag:blogger.com,1999:blog-6436195628042715004.post-85382311541580542642010-12-14T04:50:07.705-08:002010-12-14T04:50:07.705-08:00Winton,
congratulations on your post. A very tho...Winton, <br /><br />congratulations on your post. A very thoughtful and insightful analysis of the role of trust in the institutional setup. <br /><br />My contention is that former socialist countries didn't experience the transition to market economy but into crony capitalism marked by the absence of the rule of law which further downsized the level of trust. Incredibly low levels of trust had disastrous consequences for the economic performance as it established corruption and the power of informal networks (such as former communist elites transformed into modern oligarchs). The informal networks had access to insider information on privatization and stock market. In turn, these networks accumulated vast sums of wealth overnight. This was made possible only because the integrity of judicial system in protecting property rights and safeguarding the rule of law was miserable. Consequently, significant wealth and income inequality led to the spread of believes in deregulation and liberalization as exerting nagative effects. Negative externalities caused by the access of new elites to insider information led to the negative perception of the virtues of market economy. Radical institutional uncertainty also established corruption and bribe paying as substitutes for normal market transactions as well as for the tax system. That is why it is no surprise that former socialist countries increased the income per capita gap compared to the Western world in the early phase of transition.Ursula Sprukhttps://www.blogger.com/profile/09989030899817531494noreply@blogger.comtag:blogger.com,1999:blog-6436195628042715004.post-10923610161449297512010-12-13T02:28:51.627-08:002010-12-13T02:28:51.627-08:00Ursula
In relation to corruption etc I would be ve...Ursula<br />In relation to corruption etc I would be very interested in your reaction to the paper by Philippe Aghion et al which I discussed recently on my blog <a href="http://wintonbates.blogspot.com/2010/12/when-does-greater-economic-freedom.html" rel="nofollow">here</a>Winton Bateshttps://www.blogger.com/profile/07383561940886657594noreply@blogger.com