Corruption and Regulatory Structures

The methods of constraining corruption typically adopted in western industrialized societies, increasing the transparency and accountability of decision-making, and intensifying the enforcement of criminal justice prohibitions, have not always proved to be effective in developing countries. This is not surprising, given that in many of them the resources available for law enforcement are relatively modest, and corruption is deeply embedded culturally. In this paper, i suggest a strategy of reducing the opportunities for corruption, rather than attempting to suppress it altogether. I focus on regulatory institutions and procedures, identifying key aspects to these arrangements, which, if appropriately designed, can achieve this goal. Some of the design strategies that i advocate are inconsistent with the models of regulatory arrangements that western institutions have been urging developing countries to adopt.