We review microeconomic research on corruption from the last thirty years. Westart by analyzing the seminal models of corruption built on three-tier, delegationmodels. Then, go into more details of the context of corrupt deals, and discuss themain economic factors that a¤ect corruption. We discuss incentives and compensationin bureaucracies, and the interplay of market and bureaucratic structure. Competitionand contract design will also be reviewed in relation to procurement under corruptibleagents. After reviewing the theoretical contributions, we turn to the empirical evidence. We begin discussing measurement issues, and then move to the analysis of theempirical evidence relative to the theoretical models discussed in previous sections.Finally, we cover several anti-corruption mechanisms proposed in the literature anddiscuss their relative merits as devices to control or eliminate illegal activities.