A Theory of Bribes @ the Mises Institute

I’m very proud to have an essay appearing as the daily article on the Mises Institute website. Here’s an excerpt:

. . . . many entrepreneurs avoid certain regions because their culture of rampant bribery, as compared to taxation, is significantly more opaque and unpredictable, hindering economic calculation. They prefer the devil they know over the one they don’t.

Regardless of their relative merits, bribes are a phenomenon distinct from taxation and regulation. Examining where and to what extent illicit bribes exist sheds further light on the distinction between the private, voluntary economy, and the public, coercive one.

Bribes are payments or favors exchanged to influence the spending of wealth or the providing of a service, which are also somehow morally reprehensible and often secret. This highly subjective definition applies differently in four separate cases:

* bribes to individuals operating with their private property
* bribes to employees operating with their employer’s property
* bribes to businesses operating with their private property
* bribes in the public sector

(Read more from mises.org)

Note: A Ukrainian translation was printed in the The Economic Annals-XXI Journal.