Incentives for Corruption: The role of the institutional make-up of Sonangol in fostering corruption

University essay from Handelshögskolan i Stockholm/Institutionen för nationalekonomi

Author: Andreas Fransius; [2006]

Keywords: Corruption; Angola; Incentives; Institutions;

Abstract: The severity of corruption in the Angolan oil sector begs the question as to which factors in the institutional structure of the state oil company, Sonangol, that have contributed to creating incentives for corrupt behavior. A case study of the activities of the organization highlights the inherent conflicts of interest in its role as a regulator and actor on the market, which has laid the groundwork for a bidding process for contracts as well as a fiscal system that both breed corruption. The situation is further exacerbated by the distinct lack of transparency in the internal accounts of Sonangol. Furthermore, overseas aid to Angola by the Swedish government has taken a partial and therefore insufficient view of these sources of corruption, by focusing undue attention on empowerment at grassroots level.

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