igure is around 20 percent in countries reporting medium amounts of corruption.Overall, state capture and administrative corruption clearly hinder progress in transition economies. Results have shown that they have far reaching economic, social, and political repercussions that make up a vicious cycle, often stalling or reversing transition progress. Consequently, economists have prioritized the fight against corruption as an essential part of optimal reform programs. For various reasons, many economists have drawn the conclusion that shock therapy is the best method of combating corruption.In Winners Take All, Joel S. Hellman emphasizes the way in which the winners of the early stages of reform have exploited their advantages in the early stages of reform. They have incentives to block further advances in reform, theyve undermined the formation of a viable legal system to support the market economy, and they have developed a stake in the very distortions that impede the realization of the efficiency gains of a fully functioning market (Hellman 233). Countries where this form of corruption has occurred have had less overall success than those that have been able to minimize such corruption and to incorporate the voices of the losers in the process of reform. In countries that adopt more comprehensive reforms, the transitional costs of reform in the short term are lower than under partial reform, and the losers begin to see gains from reform at an earlier point in the process and at a higher level (Hellman 221). Overall, Hellman advocates comprehensive reform that successfully incorporates the rights of the losers.Daniel Kaufmann and Paul Segelbaum articulate a similar message in their article on Privatization and Corruption in the Transition. One significant contribution they make is to point out that corruption is not directly correlated with privatization, and that corruption is in fact more prevalent in non-privatized sectors...
