… is page 233 from Randy Holcombe’s awesome 2018 book, Political Capitalism: How Economic and Political Power is Made and Maintained (footnote deleted)
Regulation invites corruption more than other forms of government intervention because regulation is clearly designed to force people to do things they do not choose or to prevent them from doing things they choose to do. By their very nature, regulators have an incentive to try to reduce the effects of regulation or to design regulations that harm them and provide incentives to regulators to pass regulations that help them. A bribe to the manager benefits both the supervisor and the supervised, opening the way for a natural exchange. These bribes are often legal, they represent a fine line between corruption and rent-seeking, but this fine line is perhaps only of academic interest when analyzing political capitalism. Indeed, the elite have every incentive to legitimize such payments – part of the law by which the economy operates….
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