How business community institutions can help fight corruption

Avinash K. DIXIT

Research output: Journal PublicationsJournal Article (refereed)peer-review

13 Citations (Scopus)


Collective action by the business community to counter corruption in the award of government licenses and contracts is analyzed, by analogy with contract enforcement institutions studied by economic historians and contract law scholars. The suggested anti-corruption institution comprises a no-bribery norm, a system to detect violations, and a multilateral ostracism penalty upon conviction in a tribunal. In combination with formal state law, a business institution of sufficient quality-probability of detection and severity of punishment-can eliminate corruption; a less good institution helps reduce it. The legal and communal institutions together achieve substantially better outcomes than either by itself.
Original languageEnglish
Pages (from-to)S25-S47
Number of pages23
JournalWorld Bank Economic Review
Issue numberSupp.
Publication statusPublished - 2015

Bibliographical note

Paper presented at the 25th Annual Bank Conference on Development Economics (ABCDE), Jun 02-03, 2014, World Bank Headquarters, Washington, DC.


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