The economic approach to designing anticorruption institutions

Abstract

Contemporary economic analysis of corrupt behaviour requires practical consideration of the issues concerning projecting of social anti-corruption institutions. The economic science has accumulated sufficient practical experience of institutional construction in society, for instance approaches provided by K. Sunstein’s and E. Ostrom. The requirement of reasonability in managing economic interactions makes the society refuse from the dichotomy of market (anarchical, spontaneous) and non-market (hierarchical) institutions. The same tendency can be observed in arranging anti-corruption struggle in state management. Both approaches - aimed at creating fixed vertical hierarchy as well as at creating competition at the lowest bureaucratic level - are inappropriate. That is why anticorruption institutions arranging should be based on economic models of rational criminal and citizens involvement in law enforcement activity. These models enable to harmonize state dirigisme related to the state management ex ante with basic provision of laissez-faire doctrine – personal motives of people’s behaviour. Standard economic supply and demand model has shown inelasticity of corruption crimes supply in Russia. Non-price determinants (cultural norms, “tabu”) seem to be more significant in motivating corruption behaviour than price determinants (seriousness and probability of punishment). Economic characteristics of elasticity and inelasticity of supply and demand in the model of involvement into law enforcement activity enable to create strategy of developing social anti-corruption institutions.