Patron—Client Networks and the Economic Effects of Corruption in Asia

Abstract

Corruption is likely to be widespread during the early stages of capitalist development when capitalists enjoy low legitimacy and states face excess demand for the rights and resources they allocate. Yet the economic effects of corruption have differed greatly across Asian countries. The study argues that the differential economic performance of developers is related to the types of patron‐client networks within which their corruption has been located. The type of patron‐client network determines the types of rights exchanged through corruption and the terms of these exchanges. The study compares patron‐client networks in the Indian subcontinent, Malaysia, Thailand and South Korea. Such an examination helps to explain why in some countries corruption has attended rapid growth while in others it has implied transfers which are very damaging for growth. This provides a more nuanced understanding of the causes and effects of corruption and one which must precede the construction of appropriate institutional ...