The large number of potential incentive targets and anti-corruption actions listed in Table I raise two questions:

* how to establish the priorities of anti-corruption campaign, and

* which actions should be used to meet those targets.

Economic theory suggests that high priority programs are those that address large welfare losses caused by corruption. Two practical considerations make prioritization based on welfare losses difficult: quantifying corruption losses is often not possible and large losses are often the result of multiple governance failures. The result is that prioritization of anti-corruption campaigns must rely on analysis of an individual country's economic, political and bureaucratic conditions.

Prioritization based on welfare losses highlights one of the problems with using survey data to construct an anti-corruption program. High visibility corruption, which is likely to be identified by surveys, may have significantly lower welfare costs than less visible corruption. It is possible, for example, that the public is highly aware of corruption causing marginal losses in traffic enforcement, utility hook-ups, or business permits but largely ignorant of the economic distortions caused by revenue losses through tax evasion by wealthy individuals and large corporations.

In determining which actions should be used, Table I suggests actions which vary depending on the weaknesses of a specific government. For a country in which the government that is disproportionally large, actions which reduce the size of government are likely to reduce the scope for corruption. For a country in which a few officials appear to have become very wealthy in public service, actions should aim to reduce the gross gains from corruption. For a country in which few are held accountable for corrupt activities, anti-corruption efforts should focus on judicial independence resources.

Empirical evidence for individual anti-corruption efforts is listed in Table 2. Widespread corruption, however, is likely to be the result of multiple governance failures so successful anti-corruption campaigns are likely to be multi-pronged. For example, an official's cost-benefit analysis suggests that raising public sector wages, by itself, is unlikely to lead to lower corruption.<sup>9</sup> A program that ties wage increases to increases in satisfaction with public services, however, may encourage public officials to trade income from corrupt sources for legitimate income. The effectiveness of such a program may be further enhanced if it is jointly undertaken with efforts to increase the probability of paying penalties, say through efforts to increase judicial independence.

> 9 This assertion is supported indirectly by observation in countries facing wide spread corruption that wealthy officials are at least as susceptible to corrupt activities as poor ones (among examples of wealthy officials convicted of corruption are two former South Korean presidents, a former Pakistani prime minister and a former mayor of Beijing. In economic terms, we are arguing that, for an average individual, the utility of wealth function is not highly concave. Evidence directly supporting this assertions difficult to obtain, given the need to make inter-personal comparisons of utility.

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