Corruption Markets: Theory, Types and Dynamics

Basing on the conducted publication analysis (for 1960-2015 time period) authors argue that modern corruption studies lack a middle range theory able to put together institutional macro concepts and micro level regressions and game theoretical approach. This paper introduces the middle range concept of “corruption markets” explaining different corruption dynamics under the same anti-corruption measures applied. A corruption market is a set of corruption deals made in a given country; its type is defined by the supply and demand scissors and could either be buyer’s or seller’s market depending on the side setting the final price. Authors introduce the three-dimensional model of corruption markets based on the assessment of the quality of institutions, and scope and degree of government regulation. The study introduces eight types of corruption markets placed along the maximum-minimum axes of the three dimensions and a quantitative analysis of the key seven factors transforming corruption markets.