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Governance regimes, corruption and growth: Theory and evidence

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Author Info
Aidt, Toke
Dutta, Jayasri
Sena, Vania

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Abstract

We study the role of political accountability as a determinant of corruption and economic growth. Our model identifies two governance regimes defined by the quality of political institutions and shows that the relationship between corruption and growth is regime specific. We use a threshold model to estimate the impact of corruption on growth where corruption is treated as an endogenous variable. We find two governance regimes, conditional on the quality of political institutions. In the regime with high quality political institutions, corruption has a substantial negative impact on growth. In the regime with low quality institutions, corruption has no impact on growth. Journal of Comparative Economics 36 (2) (2008) 195-220.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 36 (2008)
Issue (Month): 2 (June)
Pages: 195-220
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Handle: RePEc:eee:jcecon:v:36:y:2008:i:2:p:195-220

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Web page: http://www.elsevier.com/locate/inca/622864

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aidt, T.S., 2009. "Corruption, Institutions and Economic Development," Cambridge Working Papers in Economics 0918, Faculty of Economics, University of Cambridge. [Downloadable!]
    Other versions:
  2. Heckelman, Jac C. & Powell, Benjamin, 2008. "Corruption and the Institutional Environment for Growth," Working Papers 2008-6, Suffolk University, Department of Economics. [Downloadable!]
  3. Andrew Hodge & Sriram Shankar & D.S. Prasada Rao & Alan Duhs, 2009. "Exploring the links between corruption and growth," Discussion Papers Series 392, School of Economics, University of Queensland, Australia. [Downloadable!]
  4. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Comparing Seasonal Forecasts of Industrial Production," Centre for Growth and Business Cycle Research Discussion Paper Series 103, Economics, The Univeristy of Manchester. [Downloadable!]
  5. Michele Berardi, 2008. "Fundamentalists vs. chartists: learning and predictor choice dynamics," Centre for Growth and Business Cycle Research Discussion Paper Series 104, Economics, The Univeristy of Manchester. [Downloadable!]
  6. Aidt, T.S. & Dutta, J., 2008. "A Theory of the Corrupt Keynesian," Cambridge Working Papers in Economics 0861, Faculty of Economics, University of Cambridge. [Downloadable!]
  7. M.Rosaria Alfano & A. Laura Baraldi, 2008. "The design of electoral rules and their impact on economic growth: the Italian case," Working Papers 3_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
  8. Keith Blackburn & Kyriakos C. Neanidis & M. Emranul Haque, 2008. "Corruption, Seigniorage and Growth: Theory and Evidence," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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