Interplay Between Corruption and Economic Freedom

Aditi Kumar, CCS Working Paper No. 254

The relation between corruption and economic freedom may intuitively appear negative. But empirical research has shown that the relation is non-linear. This is because economics per se can never create opportunities for corruption. It is the process of bringing about economic freedom that may create opportunities for corruption which is the result of violation of regulations. The main flaw is lies in the discretionary powers granted to the politicians and bureaucrats at the time of the process of economic freedom i.e. at the time of formulating regulations for business.