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Summary Economic theory has attempted to identify the conditions under which corruption has particularly harmful effects. This article evaluates these theories and argues that the classifications offered are misleading. Very successful interventionist states have suffered from corruption just as much as very unsuccessful ones. Policy responses to corruption require an understanding of the effects of corruption and the determinants of these effects. The fact which appears to have a strong effect in determining the harmfulness of corruption is the balance of power between the state and its clients. An alternative classification of the effects of corruption is suggested on this basis.
Mushtaq Khan (Mon,) studied this question.