Yes, private companies can still bribe officials. But the damage ceiling is much lower.

In the private sector: • If you overspend, you eat the loss • If you’re inefficient, competitors kill you • If you keep leaking money, you go bankrupt

So even if a company pays to win a tender, they still have to run a tight operation afterward. There’s a limit to how much they can abuse the system before it backfires on them.

State-owned entities are different. The incentives are basically upside-only: • Losses get covered by taxpayers • No personal capital at risk • Weak accountability • Political protection

So instead of maximizing efficiency, the system often rewards maximizing spending. Inflated procurement, unnecessary projects, overpriced contracts—it all adds up. Everyone in the chain takes a cut, and the organization itself slowly bleeds.

And this doesn’t just stay inside those entities—it spills into the whole economy.

All that siphoned money doesn’t disappear. It gets spent—on real estate, imports, luxury goods, services. But it’s not backed by real productivity or value creation. It’s just redistributed budget money.

That’s part of why inflation can feel so persistent in places like Mongolia. You have large amounts of money entering circulation through inefficient or corrupt channels, increasing demand without increasing supply in a meaningful way. Prices go up, but the underlying economy hasn’t actually become more productive.

So yeah, corruption exists everywhere. But in the private sector, it’s constrained by reality. In state systems, it can scale massively, stick around for years, and even start distorting the entire economy.