ABSTRACT
Corruption in the public sector is one of the greatest challenges that many developing countries face today. The corrosive effects of corruption are well documented (Bardhan 1997; Khan 1996; Rose-Ackerman 1999; Tanzi and Davoodi 1998). Particularly insidious forms of corruption involve powerful non-state actors taking the reigns of power and using their newly acquired leverage and influence to shape a country’s legal and regulatory framework to their own advantage, thereby distorting the beneficial effects of competition, private-sector-led growth, and the state itself. For the most part, that kind of corruption – different from the common image of corruption as involving fraudulent street-level bureaucrats – is more ominous, as it often implies that a powerful elite commandeers key aspects of state power.
