CORRUPTION

This paper presents two propositions about corruption. First, the stru cture of government institutions and of the political process are very important determinants of the level of corruption. In particular, wea k governments that do not control their agencies experience very high corruption levels. Second, the illegality of corruption and the need f or secrecy make it much more distortionary and costly than its sister activity, taxation. These results may explain why, in some less develo ped countries, corruption is so high and so costly to development.