Competition and corruption. What can the donor community do?

Abstract

This Brief discusses how corruption might threaten the benefits of competition in a market. Corruption can result in too much market power for some firms and thus increase prices and negatively influence the supply of goods and services in the private sector. While improved competition is important to cut prices, to improve the business climate, and to reduce the impacts of corruption, better regulation of markets is also an achievable objective in many countries, and an area where aid agencies can exert influence.