Cronyism and corruption are somewhat less common in democratic countries than in non-democratic ones, but statistical correlations don’t settle the question of whether or not free-market economies tend to degenerate into corporate cronyism. More suggestive is the fact that cronyism and corruption existed long before the advent of capitalism, large corporations, and democracy.

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Other Independent Review articles by Geoffrey M. Hodgson
    Fall 1998   Institutions and Economic Theory