I enjoyed this paper, and there's innumerable things that could be said about ingroup-outgroup dynamics and corruption.

In my personal experiences with corruption with organizations, ingroup membership often becomes increasingly narrowly defined, and defined in such a way as to benefit a certain group of individuals at the expense of others. The underlying rationale is a narcissistic entitlement or rationalization for why one person or small group of people is deserving of disproportiate benefits or flexibility at the expense of others. It starts with some kind of distorted egocentric schema about others in a more distal way, and then becomes increasingly strict and more proximal. Narcissistic egocentrism is at the core; it only manifests more weakly at first, and then becomes stronger. The ingroup boundaries never stop shrinking, because there always has to be some justification for why that particular group — which was never really defined by the initial ingroup boundaries, the ingroup was only a proxy for themselves — is more deserving than others.