Economic Philosophy of Corruption

Vocabulary flashcards detailing key terms, theories, causes, and economic consequences of corruption based on the lecture notes.

Corruption

The misuse of entrusted power or public office for private gain, with common forms including bribery, embezzlement, fraud, nepotism, favoritism, and abuse of public resources.

Economic Philosophy

The study of the ideas and principles behind economic choices, institutions, incentives, resource allocation, and the role of government.

Economic Approach to Corruption

A framework that evaluates corruption through expected benefits, costs, and risks, modeling how an individual is more tempted to act corruptly when expected private gain exceeds expected cost.

Public Choice Theory

An economic perspective that applies economic reasoning to political and government decisions, examining how officials and other actors respond to personal incentives that may conflict with public goals.

Principal–Agent Theory

A framework where citizens (principals) delegate responsibilities to public officials (agents), under which information gaps and weak monitoring can make it difficult to ensure agents act in the public interest.

Rent-Seeking Theory

A concept describing efforts to obtain economic benefits through influence or manipulation of rules rather than by creating new productive value.

Weak Institutions

An enabling condition for corruption in which rules and regulations exist but are not consistently enforced.

Limited Transparency

A condition defined by hidden decisions and poor access to information, which makes misconduct more difficult to detect.

Resource Misallocation

An economic consequence of corruption in which contracts, permits, or services are granted based on connections or ability to pay rather than on relevant merits.

Social Cost of Corruption

A negative externality occurring when the recipient of a corrupt private benefit does not bear the full cost imposed on society and uninvolved individuals.

Market Inefficiency (Corruption)

The breakdown of predictable rules and competition when prices and outcomes reflect bribes and favoritism instead of quality, cost, or productivity.

Public Procurement Distortion

A scenario where an official accepts improper payments to select a contractor without fair evaluation, separating public spending from value for money.