John R. Heilbrunn, Oil and Water? Elite Politicians and Corruption in France
In the Elf Aquitaine scandals the informality of French politics prevented control agencies from preventing corruption. A principal-agent approach and lessons drawn from political economy applications of network theory show how individuals nested informal groups in formal associations to conceal criminal activities and engage in corruption. In contrast to studies of corruption in developed countries, policy dysfunction is not explained as a failure of formal institutions. Rather, concentration on informal institutions applies methods commonly used to explain corruption in developing countries. The nested network enabled unscrupulous executives at Elf to enrich themselves and other officials in both Europe and Africa.
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