Governance, productivity and economic development

Le Van, Cuong and Pham, Ngoc-sang and Pham, Thi Kim Cuong and Tran-Nam, Binh (2025): Governance, productivity and economic development.

Abstract

This paper explores the interplay between transfer policies, R&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal revenues, and undertakes public investment (in R&D, infrastructure, etc.). Corruption is modeled as a fraction of tax revenues that is siphoned off and removed from the economy. We first establish the existence of a political-economic equilibrium. Then, using an analytically tractable framework with two private agents, we examine the effects of corruption and evaluate the impact of various policies, including redistribution and innovation-led strategies.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corruption, governance, R&D investment, economic development, productivity, general equilibrium.
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

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