A TYPOLOGY OF CORRUPT TRANSACTIONS IN DEVELOPING-COUNTRIES

Economic theory has attempted to identify the conditions under which c orruption has particularly harmful effects. This article evaluates the se theories and argues that the classifications offered are misleading . Very successful interventionist states have suffered from corruption just as much as very unsuccessful ones. Policy responses to corruptio n require an understanding of the effects of corruption and the determ inants of these effects. The fact which appears to have a strong effec t in determining the harmfulness of corruption is the balance of power between the state and its clients. An alternative classification of t he effects of corruption is suggested on this basis.