CORRUPTION AS AN INSTITUTE OF COMMUNICATION IN THE ‘PRINCIPAL – AGENT’ MODEL

Abstract

In terms of the ‘principal-agent model’ corruption can be defined as violation of the contract (formal or informal) between the agent and the principal. The resources provided by the principal are then used by the agent for their private needs. From this perspective constitutional rights can be viewed as a universal contraction policy. The paper studies the process of corruption institutionalization as a form of opportunistic behavior in agency relations. The conclusions are based on the experimental data of a recent survey conducted among the students studying the course on “Corruption: causes, consequences, counteraction”. According to the author’s position, corruption plays a role of a communication tool, fulfilling the existing institutional failures.

Keywords

• corruption
• institution
• institutional economics
• ‘principal-agent’ model
• contract
• communication
• agency relations