ERF 18th Annual Conference on Corruption and Economic Development

Corruption is unethical. But it may also have deleterious effects on economic development, breeding negative work ethics and leading to waste and misallocation of resources as well as adverse distribution of income and wealth. In addition, corruption is often associated with violence, crime and in extreme cases may result in popular revolts. The objective of the three plenary sessions in this conference is to explore the magnitude and consequences of

corruption, identify its causes (both at the micro level and in relation to the political regime) and propose possible remedies.

This plenary session will define and size up corruption and explore its effects on economic development. The speakers will answer such questions as: what is corruption? How is it measured? How did it evolve over time? What does it do to resource allocation, the use of scarce resources and distribution of income and wealth? Finally, what kind of behavior—including rent-seeking behavior—does it trigger in society? The presentations will draw on accumulated evidence on corruption worldwide, including corruption in the region that ERF covers.

In this session the speakers will address such questions as: to what extent is corruption the product of the rules governing economic transactions, the effective enforcement of these rules and the incentives/penalties associated with them? Are democratic governments less vulnerable to corrupt behavior and what can be said about future corruption in the “Arab Spring” countries? Finally, is corruption necessarily synonymous with natural resource abundance? The answers to these questions will draw on various analytical frameworks and empirical evidence, both globally and regionally.

Fighting corruption clearly depends on our understanding of what causes corruption and whether it is merely related to the rules governing economic transactions and their enforcement, or deeply rooted in the prevailing governance structure. To address the micro and macro roots of corruption, the speakers will address such questions as: what can be done to reduce corruption by changing laws and enhancing their enforcement? How important is economic liberalization in fighting corruption, particularly in terms of removing restrictions on firm entry, operation and exit? Is corruption likely to diminish in Arab Spring countries or is the outcome likely to depend on the new political forces in power? The answers to these questions will also capitalize on the experience of different countries and will draw the implications for the ERF region.