Shrinking the State to Solve Corruption

Abstract

Some argue that the best way to eliminate corruption is to minimize the role of the state. Yet this is based on a overly simple understanding about the relationship between the state, corruption, and the market. Sometimes a minimization of state involvement is appropriate, while at other times corruption requires greater state intervention and resources. First I will examine the corruption in many developing countries that is associated with government services. Though many advocate eliminating non-essential government services and interventions in an effort to eliminate corruption this can sometimes do more harm than good. Next I will examine the contention that privatization decreases corruption by eliminating government waste. I argue that though privatization has potential to decrease corruption, the privatization process itself, if done improperly, can actually lead to an increase in opportunities for corruption. Finally I will look at corruption in law enforcement, as an example of corruption which requires greater government resources as part of the solution.