Corruption is common in poor and middle-income countries, but relatively infrequent in wealthy ones. How does corruption decline with modernization? In this chapter, the author considers two ways that analytical tools that derive from the New Institutional Economics may contribute to a better understanding of corruption and modernization. First, even where laws prohibit corruption, it often persists. How do cultures of corruption develop, and how can they be changed? Second, how do anti-corruption interests organize politically to change institutions that facilitate patronage and discretion, replacing them with meritocratic, formula-bound ones?