Limited Government Limits Corruption
Alberto Mingardi, writing at EconLog:
We are back to the original argument: "liberalising" policies, that go in the direction of decreasing government powers, are in a sense the best competition policy. The less the government can give away, the least a private business could ask from it.
Most people seem to think that there's a way to limit government corruption while continually expanding the areas of our lives that the government controls or affects. This is a false. As long as governmental policies can have a large impact on the economy, people will find a way to make sure that the impact is positive for them (or at least negative for their competitors).
The only effective way to reduce corruption is to reduce the government's ability to make some groups winners and some groups losers.