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> In most industries, a private monopoly can't exist without State sponsorship. Or...barriers to entry are high. Which is likely to be the case in an economic

by jbert 18y ago

> In most industries, a private monopoly can't exist without State sponsorship. Or...barriers to entry are high. Which is likely to be the case in an economic environment where corruption is endemic. So corruption acts as a 'stable state' by helping reduce competitive pressure.

electromagnetic 18y ago
Look at the cell phone industry in Canada, there are 3 companies all of which no one in the western world has heard of. There's the good (rogers) the not so good (telus) and the outright bad (bell). Bell was state sponsored and still has all the protections of it. Last year they sent out 'free' wireless router-modems, however if you didn't subscribe to the service that gave you it for free then you'd get a bill essentially saying 'pay us $200 or send back the modem, or we'll take you to court'. The multiple late payment notices requiring payment 3 days before the bill could even be paid was the last straw, our phone and internet is being switched and bell can go stick their modem up their corrupt and incompetent asses. Rogers seems to be the only competent cellular company in Canada. This is probably because it was independently owned from the beginning and the original founder apparently kept a lot of influence until late into the game (he died like this week). They didn't hike their SMS charges (bell and telus doubled it by charging for incoming messages), however I can't speak for the quality of their other services as I have a Rogers cellphone, which is because when I came here with a T-Mobile UK phone it switched to Rogers and they seemed competent enough... I was really vindicated in my decision when the competitors hiked their prices, however mocking my wife for it wasn't a wise choice.
- jbert 18y ago
  I didn't dispute that State sponsorship may contribute to a private monopoly. I pointed out that corruption may add to the barriers to entry which would help a private monopoly persist, i.e. state sponsorship is not a necessary requirement for a private monopoly. Your example also seems to demonstrate that state sponsorship isn't sufficient to grant a private monopoly.
eru 18y ago
So reducing (any!) barriers to entry should have positive feedback effects on corruption? Africa needs more cell phones.
- jbert 18y ago
  I was thinking more the other direction. Corruption acts as a additional barrier to entry (will I get that contract? I can try and pay more money/bribe the right people, but even if I do that maybe there's a family connection I don't know about). This reduces competitive pressure, making monopoly more likely. I'm not sure that increasing competitive pressure would decrease corruption. I can see how it might help, but it might also hurt. e.g. a previously minimally corrupt business owner finding it harder to compete succumbs to temptation to join in the game due to increasing competition. So I think that part of it could go either way.
  - eru 18y ago
    Perhaps we should differentiate between bribers and bribees? (Can all kinds of corruption be reduced to this framework?)

by jbert 18y ago

electromagnetic 18y ago

Look at the cell phone industry in Canada, there are 3 companies all of which no one in the western world has heard of. There's the good (rogers) the not so good (telus) and the outright bad (bell). Bell was state sponsored and still has all the protections of it. Last year they sent out 'free' wireless router-modems, however if you didn't subscribe to the service that gave you it for free then you'd get a bill essentially saying 'pay us $200 or send back the modem, or we'll take you to court'. The multiple late payment notices requiring payment 3 days before the bill could even be paid was the last straw, our phone and internet is being switched and bell can go stick their modem up their corrupt and incompetent asses. Rogers seems to be the only competent cellular company in Canada. This is probably because it was independently owned from the beginning and the original founder apparently kept a lot of influence until late into the game (he died like this week). They didn't hike their SMS charges (bell and telus doubled it by charging for incoming messages), however I can't speak for the quality of their other services as I have a Rogers cellphone, which is because when I came here with a T-Mobile UK phone it switched to Rogers and they seemed competent enough... I was really vindicated in my decision when the competitors hiked their prices, however mocking my wife for it wasn't a wise choice.

jbert 18y ago
I didn't dispute that State sponsorship may contribute to a private monopoly. I pointed out that corruption may add to the barriers to entry which would help a private monopoly persist, i.e. state sponsorship is not a necessary requirement for a private monopoly. Your example also seems to demonstrate that state sponsorship isn't sufficient to grant a private monopoly.

eru 18y ago

So reducing (any!) barriers to entry should have positive feedback effects on corruption? Africa needs more cell phones.

jbert 18y ago
I was thinking more the other direction. Corruption acts as a additional barrier to entry (will I get that contract? I can try and pay more money/bribe the right people, but even if I do that maybe there's a family connection I don't know about). This reduces competitive pressure, making monopoly more likely. I'm not sure that increasing competitive pressure would decrease corruption. I can see how it might help, but it might also hurt. e.g. a previously minimally corrupt business owner finding it harder to compete succumbs to temptation to join in the game due to increasing competition. So I think that part of it could go either way.
- eru 18y ago
  Perhaps we should differentiate between bribers and bribees? (Can all kinds of corruption be reduced to this framework?)