Is there a direct effect of corruption on growth?

Dzhumashev, Ratbek (2009): Is there a direct effect of corruption on growth?

Abstract

Recent empirical studies find that the direct effect of corruption on growth is statistically insignificant. However, there exists a discrepancy between these results and the intuition that corruption reduces over-all productivity, because total factor productivity also depends on the quality of institutions and their efficiency. The current paper addresses this issue and offers a new perspective on growth effects of corruption and shows that direct and indirect growth effects of corruption can be statistically significant. Moreover, the empirical results confirm the existence of both negative and positive growth effect of corruption.

• Item Type: MPRA Paper
• Language: English
• Keywords: corruption, growth
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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