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TABLE OF CONTENTS 
What is corruption? 
1 
Classifications of corruption 
Political corruption versus bureaucratic corruption 
State Capture versus administrative corruption 
Petty corruption versus grand corruption 
Functionalist approach versus methodological individualism 
Corruption with theftversus corruption “without theft” 
Chaotic corruption versus well-organized corruption 
Economic corruption versus social corruption 
Strictu sensu corruption versus latu sensu corruption
Corruption has always been a very wide-spread phenomenon throughout history, well-established in 
Mesopotamia, where gifts were the natural counterpart of services, Pericles’ Athens and Cicero’s Rome, 
where it was formally condemned but actually tolerated, Reformation’s Europe, where public ethics knew a 
great development, and even in modern society, where “favors, gifts and bribes are ordinary business. 
But how to define corruption? Most of people would surely be able to recognize a corrupt practice when they 
see one, but hardly anyone will then agree on what is corruption itself. Let us seek some help from etymology: 
the word corruption comes from the Latin rumpere, that means “to break up, to dismantle”. 
What does corruption dismantle? Well, probably a set of moral or legal rules. This suggests to define corruption 
as “the (ab)use of public office for private gains” (Bardhan, 1997) or “the sale of government property by 
government officials aiming at personal gains” (Shleifer e Vishny, 1993). 
However, not all illegal uses and abuses of public office are corrupted acts: they might be simple theft or fraud. 
Moreover, such definitions are not satisfactory as corruption is not only a public domain phenomenon. Illegal 
practices from private citizens that aim to damage other private citizens or enterprises are indeed corruption. 
2 
TABLE OF CONTENTS 
What is corruption?
TABLE OF CONTENTS 
Classifications of corruption 
We will now concentrate on public corruption. This can be further specified as follows: 
1. political vs. bureaucratic corruption, depending on the involved public subject 
2. state-capture corruption vs. administrative corruption, depending on the timing in the legal process 
(before or after the implementation of a rule) 
3. petty or grand corruption schemes 
4. systemic or individual corruption 
5. corruption with or without theft (see Shleifer and Vishny, 1993) 
6. chaotic or organized corruption, depending on the level of the corrupted network’s development 
7. economic or social corruption 
8. corruption strictu sensu or corruption latu sensu, depending on the presence or not of professional 
duties’ violations 
3
TABLE OF CONTENTS 
Political corruption versus bureaucratic 
corruption 
Political corruption is usually linked to the elections process or to particular political roles or power positions. 
Some of the phenomena linked to political corruption, that is more common in less-developed countries 
where democratic institutions are weak or lacking, are: 
1. irregular elections 
2. nepotism or favoritism 
3. personal rules and laws 
4. bribing the press 
5. false electoral promises 
6. influencing the voters by distributing money or other gifts 
7. influencing the legislator according to own private interests 
Bureaucratic corruption, on the other hand, is about administrative activities: 
1. obtaining or obtaining faster a service that corresponds to a right 
2. distorted application or violation of administrative rules and procedures 
4
TABLE OF CONTENTS 
State Capture versus administrative 
corruption 
Furthermore, state-capture corruption and administrative corruption differ as they influence either the 
elaboration or the application of the law. This definition comes from “Anti-corruption in Transition. A 
Contribution to the Policy Debate”, The Word Bank, 2000 Washington, D.C. 
In a few words, State-capture corruption is about lobbies or interest groups influencing the legislative process 
through bribes and illegal benefits, while administrative corruption is about the same groups of individuals 
asking for favors in the application of an already approved law. 
5
TABLE OF CONTENTS 
Petty corruption versus grand 
corruption 
6 
In addition, we can distinguish between petty corruption and grand corruption, the latter being far more 
perilous as it involves the whole political and legislative process or high-rank financial and administrative 
powers. Petty corruption, on the other hand, is less ambitious but very pervasive. Direct victims are 
private citizens, while benefits (usually of a small amount) go directly to civil servants. The aim is to 
illegally facilitate or accelerate administrative services.
TABLE OF CONTENTS 
Functionalist approach versus 
methodological individualism 
Also, there are differences in the definition of corruption by functionalist or individualist scholars, so that we may 
identify corruption as a “functional disfunction” or corruption as a “rational choice”. 
The first approach, developed in the ’50s and ’60s, refutes to consider corruption as a pathology and maintains 
that it has structural origins so that it can be explained consistently with the historical economic path of a nation. 
Corruption, in a few words, tends to arise naturally in less-developed countries, so as to foster development and 
help enterprises in overcoming bureaucratic obstacles, and equally naturally tends to dissolve as the economy 
grows. 
Such a view implicates that corruption is not a moral dilemma and may even be thought to have a positive effect 
for the economy, when it is used as a “lubricant”. Moreover, it will eventually disappear as economic 
development makes it useless. 
These implications of the functionalist approach has been the source of much criticism, giving rise to many other 
views. 
7
TABLE OF CONTENTS 
Functionalist approach versus 
methodological individualism 
Among them, the Political Economy or individualist approach considers corruption as the result of a rational 
“benefit vs. costs” comparison. Corruption episodes are then the result of an economic transaction. 
Corruption as the situation in which the corrupted individual is the agent of some organization or individual and 
the bribe is the way to induce him/her to privilege its own interest and not the principal’s. 
In conclusion, corruption is to be interpreted as a transaction that a third party carries out to divert an agent 
from fulfilling his/her duties in the principal’s interest and do something illegal for the own agent’s and the third 
party’s benefit. 
This may or may not result in a damage for the principal, after all. 
For such a relationship of corruption to be maintained, not only do we need a principal and an agent with some 
discretionary power and a third party able to use this power to his/her own interest, but also weak institutions 
that are not able to refrain their employee from illegal conducts. 
8
TABLE OF CONTENTS 
Corruption with theftversus corruption 
“without theft” 
Suppose that the government is a monopolist in the production of a homogeneous good, and the civil servant 
has some discretionary power and may use it for his/her own interest. He/she will only tend to maximize 
income from bribes. 
If there is no theft, the corrupt civil servant will sell the service at a price equal to its cost plus the bribe. The 
cost goes into the State’s pockets while the bribe stays with the corrupt employee. 
Corruption with theft, on the other hand, sees benefits split up between the corrupt employee and enterprises 
paying for the bribe. 
Why so? 
Well, suppose that the corrupt civil servant sells the service at a price that is lower than the legal one. If the 
sum of the bribe and the illegal price is less than the legal price, the corrupted transaction makes the 
enterprise more competitive and allows it to extract a benefit. The enterprise has no incentive whatsoever, 
then, to break the corrupt agreement. Consequently, it will be very unlikely to discover and disrupt said 
agreement. 
9
TABLE OF CONTENTS 
Corruption with theftversus corruption 
“without theft” 
Evidently, corruption without theft makes the price higher and the quantity of the good sold lower, while 
corruption without theft tends to do the opposite. 
The latter, however, is also more pervasive and dangerous. 
Also, the two types differ with respect to the impact on public finances, which is harsher in the case of 
corruption with theft. 
Finally, a competitive bureaucratic structure, with many public managers in charge of the same activity and 
competing to maximize their income from bribes, may help to reduce actual corruption if corruption without 
theft were prevalent. If corruption with theft is, on the other hand, more wide-spread, the numerous public 
managers will have a further incentive to co-operate and create a cartel. 
10
TABLE OF CONTENTS 
Chaotic corruption versus well-organized 
corruption 
Well-organized corruption is thought to have less dangerous repercussions on the economic system than 
chaotic corruption. 
The level of “organization” is influenced by the presence of informal mechanisms for contracts enforcement and 
by the frequency of interactions between potentially corrupted individuals and their potential corrupters, not to 
mention any mean of coordination among the former. 
Corruption is more organized the more it takes place in exclusive clubs or among specific groups of people, 
resulting this way in a sort of tax that private citizens pay to specific persons to obtain specific services. 
It is remarkable that this situation is unlikely to be broken up as no involved single individual has an incentive to 
do so. 
We can find different models according to which corruption is organized, respectively, as a monopoly, in a 
competitive way or according to a monopolistic competition scheme. 
The first type, the monopoly, is characterized by a king or a dictator that organizes the corruption market and 
guarantees both access to the relevant information (who to and how much to pay) and protection to “property-rights” 
11 
– so that those who pay are sure to obtain the service they paid for. This is a rather stable system. 
Should the market for corruption be competitive, on the other hand, the system tends to be chaotic and 
unstable. 
No guarantees to people paying a bribe are provided by anyone so that individuals may very well pay twice for 
the same service.
TABLE OF CONTENTS 
Economic corruption versus social 
corruption 
12 
We may distinguish further between economic corruption and social corruption. 
The former usually takes place in a market and is accompanied by an exchange in money or other 
material goods. 
Social corruption, on the other hand, is more about exchanging immaterial benefits. 
It is usually accompanied by nepotism, clientelism and favoritism. Such immaterial bribes do not benefit 
corrupt employees directly but contribute to strengthen the organization they belong to and the whole 
corruption network. Social corruption is much more pervasive and disruptive than economic one, 
because it endangers collective moral integrity and is more easily tolerated by civil society.
TABLE OF CONTENTS 
Strictu sensu corruption versus latu 
sensu corruption 
Finally, corruption can be intended strictu sensu when the corrupt public employee violates his/her office 
duties. 
This is sanctioned by art. 319 of Italian Criminal Law Code: corruption for an act in violation of office’s 
duties. It says: “The public employee that accept any sum of money or other utility, or the promise to be 
given it, to omit or delay a due act is punished with 2 to 5 years imprisonment”. 
Corruption latu sensu is to be identified when no violation takes place, as in art. 318: corruption for a due 
act. It says: “the public employee that accept any illegal sum of money or other utility, or the promise to be 
given it, to accomplish to a due act is punished with 0.5 to 3 years imprisonment. Should the act be already 
accomplished when the illegal payment is received, the punishment is reduced to up to 1 year 
imprisonment.” 
13
14 
TABLE OF CONTENTS 
What is corruption? 
Thank You for your kindly attention

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Bortoletti, what is corruption?, commissione europea, ipa zagabria 21 23 novembre 2011

  • 1. TABLE OF CONTENTS What is corruption? 1 Classifications of corruption Political corruption versus bureaucratic corruption State Capture versus administrative corruption Petty corruption versus grand corruption Functionalist approach versus methodological individualism Corruption with theftversus corruption “without theft” Chaotic corruption versus well-organized corruption Economic corruption versus social corruption Strictu sensu corruption versus latu sensu corruption
  • 2. Corruption has always been a very wide-spread phenomenon throughout history, well-established in Mesopotamia, where gifts were the natural counterpart of services, Pericles’ Athens and Cicero’s Rome, where it was formally condemned but actually tolerated, Reformation’s Europe, where public ethics knew a great development, and even in modern society, where “favors, gifts and bribes are ordinary business. But how to define corruption? Most of people would surely be able to recognize a corrupt practice when they see one, but hardly anyone will then agree on what is corruption itself. Let us seek some help from etymology: the word corruption comes from the Latin rumpere, that means “to break up, to dismantle”. What does corruption dismantle? Well, probably a set of moral or legal rules. This suggests to define corruption as “the (ab)use of public office for private gains” (Bardhan, 1997) or “the sale of government property by government officials aiming at personal gains” (Shleifer e Vishny, 1993). However, not all illegal uses and abuses of public office are corrupted acts: they might be simple theft or fraud. Moreover, such definitions are not satisfactory as corruption is not only a public domain phenomenon. Illegal practices from private citizens that aim to damage other private citizens or enterprises are indeed corruption. 2 TABLE OF CONTENTS What is corruption?
  • 3. TABLE OF CONTENTS Classifications of corruption We will now concentrate on public corruption. This can be further specified as follows: 1. political vs. bureaucratic corruption, depending on the involved public subject 2. state-capture corruption vs. administrative corruption, depending on the timing in the legal process (before or after the implementation of a rule) 3. petty or grand corruption schemes 4. systemic or individual corruption 5. corruption with or without theft (see Shleifer and Vishny, 1993) 6. chaotic or organized corruption, depending on the level of the corrupted network’s development 7. economic or social corruption 8. corruption strictu sensu or corruption latu sensu, depending on the presence or not of professional duties’ violations 3
  • 4. TABLE OF CONTENTS Political corruption versus bureaucratic corruption Political corruption is usually linked to the elections process or to particular political roles or power positions. Some of the phenomena linked to political corruption, that is more common in less-developed countries where democratic institutions are weak or lacking, are: 1. irregular elections 2. nepotism or favoritism 3. personal rules and laws 4. bribing the press 5. false electoral promises 6. influencing the voters by distributing money or other gifts 7. influencing the legislator according to own private interests Bureaucratic corruption, on the other hand, is about administrative activities: 1. obtaining or obtaining faster a service that corresponds to a right 2. distorted application or violation of administrative rules and procedures 4
  • 5. TABLE OF CONTENTS State Capture versus administrative corruption Furthermore, state-capture corruption and administrative corruption differ as they influence either the elaboration or the application of the law. This definition comes from “Anti-corruption in Transition. A Contribution to the Policy Debate”, The Word Bank, 2000 Washington, D.C. In a few words, State-capture corruption is about lobbies or interest groups influencing the legislative process through bribes and illegal benefits, while administrative corruption is about the same groups of individuals asking for favors in the application of an already approved law. 5
  • 6. TABLE OF CONTENTS Petty corruption versus grand corruption 6 In addition, we can distinguish between petty corruption and grand corruption, the latter being far more perilous as it involves the whole political and legislative process or high-rank financial and administrative powers. Petty corruption, on the other hand, is less ambitious but very pervasive. Direct victims are private citizens, while benefits (usually of a small amount) go directly to civil servants. The aim is to illegally facilitate or accelerate administrative services.
  • 7. TABLE OF CONTENTS Functionalist approach versus methodological individualism Also, there are differences in the definition of corruption by functionalist or individualist scholars, so that we may identify corruption as a “functional disfunction” or corruption as a “rational choice”. The first approach, developed in the ’50s and ’60s, refutes to consider corruption as a pathology and maintains that it has structural origins so that it can be explained consistently with the historical economic path of a nation. Corruption, in a few words, tends to arise naturally in less-developed countries, so as to foster development and help enterprises in overcoming bureaucratic obstacles, and equally naturally tends to dissolve as the economy grows. Such a view implicates that corruption is not a moral dilemma and may even be thought to have a positive effect for the economy, when it is used as a “lubricant”. Moreover, it will eventually disappear as economic development makes it useless. These implications of the functionalist approach has been the source of much criticism, giving rise to many other views. 7
  • 8. TABLE OF CONTENTS Functionalist approach versus methodological individualism Among them, the Political Economy or individualist approach considers corruption as the result of a rational “benefit vs. costs” comparison. Corruption episodes are then the result of an economic transaction. Corruption as the situation in which the corrupted individual is the agent of some organization or individual and the bribe is the way to induce him/her to privilege its own interest and not the principal’s. In conclusion, corruption is to be interpreted as a transaction that a third party carries out to divert an agent from fulfilling his/her duties in the principal’s interest and do something illegal for the own agent’s and the third party’s benefit. This may or may not result in a damage for the principal, after all. For such a relationship of corruption to be maintained, not only do we need a principal and an agent with some discretionary power and a third party able to use this power to his/her own interest, but also weak institutions that are not able to refrain their employee from illegal conducts. 8
  • 9. TABLE OF CONTENTS Corruption with theftversus corruption “without theft” Suppose that the government is a monopolist in the production of a homogeneous good, and the civil servant has some discretionary power and may use it for his/her own interest. He/she will only tend to maximize income from bribes. If there is no theft, the corrupt civil servant will sell the service at a price equal to its cost plus the bribe. The cost goes into the State’s pockets while the bribe stays with the corrupt employee. Corruption with theft, on the other hand, sees benefits split up between the corrupt employee and enterprises paying for the bribe. Why so? Well, suppose that the corrupt civil servant sells the service at a price that is lower than the legal one. If the sum of the bribe and the illegal price is less than the legal price, the corrupted transaction makes the enterprise more competitive and allows it to extract a benefit. The enterprise has no incentive whatsoever, then, to break the corrupt agreement. Consequently, it will be very unlikely to discover and disrupt said agreement. 9
  • 10. TABLE OF CONTENTS Corruption with theftversus corruption “without theft” Evidently, corruption without theft makes the price higher and the quantity of the good sold lower, while corruption without theft tends to do the opposite. The latter, however, is also more pervasive and dangerous. Also, the two types differ with respect to the impact on public finances, which is harsher in the case of corruption with theft. Finally, a competitive bureaucratic structure, with many public managers in charge of the same activity and competing to maximize their income from bribes, may help to reduce actual corruption if corruption without theft were prevalent. If corruption with theft is, on the other hand, more wide-spread, the numerous public managers will have a further incentive to co-operate and create a cartel. 10
  • 11. TABLE OF CONTENTS Chaotic corruption versus well-organized corruption Well-organized corruption is thought to have less dangerous repercussions on the economic system than chaotic corruption. The level of “organization” is influenced by the presence of informal mechanisms for contracts enforcement and by the frequency of interactions between potentially corrupted individuals and their potential corrupters, not to mention any mean of coordination among the former. Corruption is more organized the more it takes place in exclusive clubs or among specific groups of people, resulting this way in a sort of tax that private citizens pay to specific persons to obtain specific services. It is remarkable that this situation is unlikely to be broken up as no involved single individual has an incentive to do so. We can find different models according to which corruption is organized, respectively, as a monopoly, in a competitive way or according to a monopolistic competition scheme. The first type, the monopoly, is characterized by a king or a dictator that organizes the corruption market and guarantees both access to the relevant information (who to and how much to pay) and protection to “property-rights” 11 – so that those who pay are sure to obtain the service they paid for. This is a rather stable system. Should the market for corruption be competitive, on the other hand, the system tends to be chaotic and unstable. No guarantees to people paying a bribe are provided by anyone so that individuals may very well pay twice for the same service.
  • 12. TABLE OF CONTENTS Economic corruption versus social corruption 12 We may distinguish further between economic corruption and social corruption. The former usually takes place in a market and is accompanied by an exchange in money or other material goods. Social corruption, on the other hand, is more about exchanging immaterial benefits. It is usually accompanied by nepotism, clientelism and favoritism. Such immaterial bribes do not benefit corrupt employees directly but contribute to strengthen the organization they belong to and the whole corruption network. Social corruption is much more pervasive and disruptive than economic one, because it endangers collective moral integrity and is more easily tolerated by civil society.
  • 13. TABLE OF CONTENTS Strictu sensu corruption versus latu sensu corruption Finally, corruption can be intended strictu sensu when the corrupt public employee violates his/her office duties. This is sanctioned by art. 319 of Italian Criminal Law Code: corruption for an act in violation of office’s duties. It says: “The public employee that accept any sum of money or other utility, or the promise to be given it, to omit or delay a due act is punished with 2 to 5 years imprisonment”. Corruption latu sensu is to be identified when no violation takes place, as in art. 318: corruption for a due act. It says: “the public employee that accept any illegal sum of money or other utility, or the promise to be given it, to accomplish to a due act is punished with 0.5 to 3 years imprisonment. Should the act be already accomplished when the illegal payment is received, the punishment is reduced to up to 1 year imprisonment.” 13
  • 14. 14 TABLE OF CONTENTS What is corruption? Thank You for your kindly attention