As a general rule, we pay a higher price for something whenever we feel that that higher price justifies the benefits that we hope to derive from that something. This something can be anything ranging from a tube of tooth paste to a government contract.
As a basic day to day way of thinking I believe everyone does a bit of mental arithmetic before entering any transaction, consciously or otherwise.
The basic cause of any transaction is that if I buy, say a Tube of Tooth Paste at Rs. 50/-, this means that I value the utility of The Tube of Tooth Paste more than Rs. 50/- and the seller values Rs. 50/- more than that Tube of Tooth Paste.
This logic applies to ALL transactions on the face of the earth, whether monetary or non-monetary, charitable or non-charitable.
Without judging the validity or intensions of laws or their correctness, I believe that whenever a law is enacted that in some way interferes with the above logic, we see the birth of Economics of Corruption.
Further, without judging the validity or intensions of laws, I believe that whenever a law is enacted that in some way interferes with the free will of a member of a society, we see the birth of Economics of Corruption.
From the above, It should not be understood that I am an Anarchist or that I believe in a Free for All society. No I do not.
The only point that I am trying to make here is that since we cannot live in a lawless society, we have to have an elected government but whenever the activities of the Government goes beyond pure protection of rights of the members of the society and transgresses into free economic choice of it’s members, Corruption is inevitable.