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Compare the industries thought to have the largest problems with bribery with those that have the least problems
Compare the industries thought to have the largest problems with bribery with those that have the least problems. What patterns do you see? What factors make some industries more conducive to bribery than others?
Expert Solution
The industries with the most corruption usually have one side with a large amount of market power. This market power either invites corruption or is caused by corruption. Examples can be industries where the government creates legal barriers to entry. These companies lobby or sometimes simply bribe government officials for these barriers to increase market power and thus increase profits. These are cases where corruption causes a large concentration of market power.
Corruption and bribery can also be a side effect of market power. When a firm is a monopoly or a monopsony, the other side can try to bribe the executives to act a certain way. The executive then acts against the firm's best interest to for the bribe. In general, a concentration of power invites corruption both in government and the market.
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