On optimal corruption: an analysis of societal and business ethics in Greece

English title: On optimal corruption: an analysis of societal and business ethics in Greece

Author(s): -

Language: English

Type: Conference paper/poster

Year: 2014


The paper analyses corruption as a distinct behavior of individuals embedded between the opposite poles of ‘optimal’ and ‘destructive’ rent-seeking. The first pole relates to the case where corruption is analyzed as an almost ‘desirable’ mechanism that can help the economy, and entrepreneurs in particular, to overcome bureaucratic and inefficient regulations. In this case, the optimal allocation of resources via the market mechanism depends upon the existence of an ‘optimal level’ of corruption. The second pole relates to the opposite case where corruption is used by both the public and the private spheres of the economy in order to change the allocation of resources and incomes to the benefit of certain groups. In this case corruption aims at continuously re-generating itself through self-enhancing institutional mechanisms that serve the ‘rent-seeking facet’ of corruption. Available knowledge agrees only upon the multiple facets of the phenomenon. Thus, corruption is acknowledged as a complex phenomenon whilst many of the existing conceptions about it might be misleading. First, it is an open debate whether entrepreneurial efforts using corruption as a means to change the institutional context may be equilibrium disturbing towards enhancing or reducing welfare. In addition, corruption as a form of public office misuse is harmful not only because it changes the allocation of income and alters the motives of agents involved in the market but also because it privatizes valuable aspects of the public life and disturbs the institutional basis of public representation, debate and choice. Taken together these two areas of destruction effects create an institutional context that might be described by high levels of tolerance towards corruption or else a social consensus towards corruption. Here it is argued that the effects of corruption might be detrimental by means of destructing both the public and the private sphere of the economy. To that extent we analyze the society’s and the entrepreneurs’ views in order to provide evidence on whether certain important instructional characteristics and values aspired by individuals in Greece are understood as rent-seeking or corruption practices. In other words, the study attempts to identify whether there is a widespread social consensus towards the one or the other behavioral context. We construct five indices to approximate views, attitudes and practices towards corruption and build a set of interrelated hypotheses that can give us an empirical approximation of the potential existence of societal and business consensus towards corruption.

Conference name: Eurasia Business and Economics Society 2014 Conference

Location: Barcelona, Spain

Start date: Oct 23, 2014

Type: Paper