State Capture and Corruption in Transition Economies
State capture by industrial lobbyists is a significant obstacle to normal economic development of formerly command (socialist) economies, at both the local and the national levels. It is prevalent in transition economics because of an excessively concentrated industrial structure and low labour mobility, both horizontal and vertical, a high level of discretion of public officials in economic affairs, and generally weak political institutions. Most of these features might be traced back to the pre-transition legacy.
KeywordsAdministrative corruption Agency problems Barriers to entry Civil society Coase theorem Command economy Concentration Control rights Corporate governance Corruption Decentralization Enforcement of contracts Fiscal federalism Influence Innovation Interjurisdictional mobility Local government Oligarchs Property rights protection Quotas and tariffs Rents Rule of law Social networks Special interests State capture Tiebout hypothesis Transition and institutions Transition economies Wealth effects
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