Tullock and the welfare costs of corruption: there is a “political Coase Theorem”
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© 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”.
Published Version (Please cite this version)10.1007/s11127-018-0610-9
Publication InfoMunger, 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.
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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,