1. TABLE OF CONTENTS
What is corruption?
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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.
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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
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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
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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.
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6. TABLE OF CONTENTS
Petty corruption versus grand
corruption
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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.
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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.
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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.
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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.
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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”
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– 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
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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.”
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14. 14
TABLE OF CONTENTS
What is corruption?
Thank You for your kindly attention