Tullock and the welfare costs of corruption: there is a “political Coase Theorem”
Abstract
© 2018, Springer Science+Business Media, LLC, part of Springer Nature. Gordon Tullock
developed an approach to understanding dynamic processes of political change and policy
outcomes. The key insight is the notion that political insiders have a comparative
advantage—because they face lower transaction costs—in manipulating rules. The result
is that political actors can collect revenues from threatening to restrict, or offering
to loosen, access to valuable permissions, permits, or services. To the extent that
the ability to pay for such favorable treatment is a consequence of private activities
that produce greater social value, there is a “political Coase theorem”: corruption
makes bad systems more efficient. But the dynamic consequences are extremely negative,
because of the inability to institute reforms resulting from application of Tullock’s
“transitional gains trap”.
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https://hdl.handle.net/10161/17611Published Version (Please cite this version)
10.1007/s11127-018-0610-9Publication Info
Munger, Michael (2018). Tullock and the welfare costs of corruption: there is a “political Coase Theorem”.
Public Choice. 10.1007/s11127-018-0610-9. Retrieved from https://hdl.handle.net/10161/17611.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Show full item recordScholars@Duke
Michael C. Munger
Professor of Political Science
Professor of Political Science, and Director of the PPE Certificate Program. His primary
research focus is on the functioning of markets, regulation, and government institutions.
He has taught at Dartmouth College, University of Texas, and University of North Carolina
(where he was Director of the Master of Public Administration Program), as well as
working as a staff economist at the Federal Trade Commission during the Reagan Administration.
He is a past President of the Public Choice Society,

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