Corrupt Bureaucracy and Growth

Djumashev, Ratbek (2006): Corrupt Bureaucracy and Growth.

Abstract

In this paper, we analyze implications of corruption on growth. We extend existing growth models by incorporating ubiquitous corruption as a by-product of the public sector. Corruption affects both taxation and public good provision, and therefore causes income redistribution and inefficiencies in the public sector. These effects of corruption lead to lower growth through distortions of investment incentives and resources allocation.

• Item Type: MPRA Paper
• Institution: Department of Economics, Monash University
• Language: English
• Keywords: Corruption; growth; public goods; tax evasion
• Subjects: H - Public Economics > H4 - Publicly Provided Goods > H40 - General; D - Microeconomics > D9 - Intertemporal Choice > D92 - Intertemporal Firm Choice, Investment, Capacity, and Financing; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General

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