In writing this review, several themes emerged. First, although there has been a revolution
in the measurement of corruption over the past few years, estimated levels of corruption
are remarkably heterogeneous, so there remains little consensus about its magnitude.
Second, corrupt behavior has significant adverse consequences for efficiency and equity
outcomes. Third, we find fairly robust evidence that corrupt behavior can be modeled in
line with a few general economic principles: Corrupt officials respond to monitoring and
punishments as one would expect from basic incentive theory, and standard market forces
influence the level of bribes. That said, the ability of corrupt officials to substitute to
alternate forms of corruption and to otherwise adapt to policy changes, either in the short
run or the long run, suggests that applications of these principles can be tricky in practice.