Corruption and output composition
-
0:02 - 0:06One of the problems with corruption is
that sometimes you get the wrong outputs, -
0:06 - 0:07the wrong kinds of output.
-
0:09 - 0:11Let's compare two kinds
of government projects. -
0:11 - 0:16The first kind of project is local,
small-scale, labor-intensive. -
0:16 - 0:19Imagine educating children in a village.
-
0:20 - 0:23The second kind of project
is very glamorous. -
0:23 - 0:24It's capital-intensive.
-
0:24 - 0:27It has a lot of hard-to-value
inputs and outputs. -
0:27 - 0:31Imagine, for instance,
government building a large dam. -
0:32 - 0:36With which kind of project
is it easier to skim money off the top? -
0:36 - 0:38Well, when the inputs
of the project are opaque, -
0:38 - 0:41when the project lacks transparency,
-
0:41 - 0:45and when there are large expenditures
running both in and out of the project, -
0:45 - 0:49in that case, it's probably easier
to have bribery and corruption. -
0:49 - 0:50So what's the result of this?
-
0:51 - 0:55A lot of governments will build
too many large-scale capital projects -
0:55 - 0:57with hard-to-value inputs and outputs
-
0:57 - 1:02and perhaps too few small-scale,
local labor-intensive outputs, -
1:02 - 1:04such as educating children in a village.
-
1:04 - 1:07And again, this is a distortion
driven by corruption. -
1:09 - 1:11This argument comes from a paper
called "Corruption" -
1:11 - 1:13by Shleifer and Vishny.
- Title:
- Corruption and output composition
- Description:
-
How does corruption skew the mix of outputs? Do we get too many dams and too little education?
Corresponding lesson: http://mruniversity.com/corruption-and-output-composition
- Video Language:
- English
- Team:
- Marginal Revolution University
- Project:
- Other videos
- Duration:
- 01:14
Maurício Kakuei Tanaka edited English subtitles for Corruption and output composition | ||
Michel Smits edited English subtitles for Corruption and output composition | ||
Michel Smits edited English subtitles for Corruption and output composition | ||
Michel Smits edited English subtitles for Corruption and output composition |