Corruption: Market reform and technology

Abstract

Pro-market reforms and information and communication technology (ICT) are widely believed to be important instruments for enhancing efficiency. Our chapter asks a different question about these two instruments: how effective are they in fighting corruption? We suggest a typology of corruption, and argue that the type of corruption determines which of the instruments would be effective if at all, and to what extent. To make markets contestable and let them find equilibrium without intervention can reduce or eliminate certain types of corruption but not all. In some cases we need contributions from ICT. There are yet others where the two instruments should be used in a complementary way. Finally, some types of corruption are immune against both market reform and ICT.