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Corruption And Schumpeterian Growth In Different Economic Environments

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  • SERGUEY BRAGUINSKY

Abstract

This paper takes up the phenomenon of corruption and its relationship to growth explicitly in conjunction with overall institutional environment in which it occurs. The literature has pointed out that some forms of corruption are more detrimental to growth, while others can be considered even beneficial, given the underlying regulation. These notions are made more precise in a framework of Schumpeterian growth in "capitalist" and "totalitarian" environments. The analysis shows that corruption in an overall competitive capitalist environment ordinarily is of a transitive nature and is likely to be conducive to economic growth rather than otherwise. On the other hand, in totalitarian environment, corruption, though also possibly conducive to static welfare, becomes deeply entrenched in the socio-economic system and inevitably leads to a breakdown of the system. That breakdown, in turn, greatly enhances the possibilities for corruption and makes it especially detrimental to the prospects for resumed economic growth. Copyright 1996 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 14 (1996)
Issue (Month): 3 (07)
Pages: 14-25

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Handle: RePEc:bla:coecpo:v:14:y:1996:i:3:p:14-25

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Cited by:
  1. Hella Engerer, 1998. "Ursachen, Folgen und Bekämpfung von Korruption: liefern ökonomische Ansätze bestechende Argumente?," Discussion Papers of DIW Berlin 161, DIW Berlin, German Institute for Economic Research.
  2. Peyton, Kyle & Belasen, Ariel, 2010. "The case for human development: a cross-country analysis of corruption perceptions," MPRA Paper 31385, University Library of Munich, Germany.
  3. Rahim M.0 Quazi, 2014. "Corruption and Foreign Direct Investment in East Asia and South Asia: An Econometric Study," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 231-242.
  4. Stephen S. Everhart & Mariusz A. Sumlinski, 2001. "Trends in Private Investment in Developing Countries : Statistics for 1970-2000 and the Impact on Private Investment of Corruption and the Quality of Public Investment," World Bank Publications, The World Bank, number 13989, October.
  5. Wolfgang Maennig, 2004. "Korruption im internationalen Sport: ökonomische Analyse und Lösungsansätze," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(2), pages 263-291.
  6. Habib, M. & Zurawicki, L., 2001. "Country-level investments and the effect of corruption -- some empirical evidence," International Business Review, Elsevier, vol. 10(6), pages 687-700, December.
  7. Anna Alon & Amy Hageman, 2013. "The Impact of Corruption on Firm Tax Compliance in Transition Economies: Whom Do You Trust?," Journal of Business Ethics, Springer, vol. 116(3), pages 479-494, September.
  8. Roth, Timothy P., 1997. "Competence-difficulty gaps, ethics and the new social welfare theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(5), pages 533-552.
  9. Roth, Timothy P., 1999. "Consequentialism, rights, and the new social welfare theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 28(1), pages 95-109.
  10. Ingrid Ott, 2004. "Bureaucratic corruption and macroeconomic performance," Computing in Economics and Finance 2004 303, Society for Computational Economics.

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