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In countries where corruption run deep to the point it is not considered illegal; can such payments be considered as transaction costs?

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Yes, corruption can be considered transaction cost.

You can read about that in the paper Honor among Thieves: A Transaction-Cost Interpretation of Corruption in Third World Countries by Bryan W. Husted (Business Ethics Quarterly, Volume 4, Issue 1, January 1994, pp. 17-27)

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