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Corruption and economic development: A critical review of literature

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  • Farida, Mohamad
  • Ahmadi-Esfahani, Fredoun Z.
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    Abstract

    The body of theoretical and empirical research that objectively addresses the problem of corruption has grown considerably in recent years (Elliot 1997; Coolidge and Rose-Ackerman 1997; Gill 1998; Girling 1997; HDC 1999; Kaufmann and Sachs 1998; Mauro 1995; Paul and Guhan 1997; Shleifer and Vishnay 1998; Stapenhurst and Kpundeh 1998; Vittal 1999; World Bank 1997). A preliminary analysis of the literature shows that corruption is recognised as a complex phenomenon, as the consequence of more deep seated problems of policy distortion, institutional incentives and governance. It thus cannot be addressed by simple legal acts proscribing corruption. This paper aims at reviewing the different definitions for corruption in addition to its perceived costs and benefits. Furthermore, in an attempt to measure corruption, the paper will address several theories and models that might help in developing a comprehensive model of corruption.

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    Bibliographic Info

    Paper provided by Australian Agricultural and Resource Economics Society in its series 2006 Conference (50th), February 8-10, 2006, Sydney, Australia with number 139727.

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    Date of creation: 2006
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    Handle: RePEc:ags:aare06:139727

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    Keywords: Political Economy; Public Economics;

    References

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    1. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    2. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
    3. Shang-Jin Wei, 2000. "Corruption, composition of capital flows, and currency crises," Policy Research Working Paper Series 2429, The World Bank.
    4. Corsetti, Giancarlo & Pesenti, Paolo & Roubini, Nouriel, 1999. "Paper tigers?: A model of the Asian crisis," European Economic Review, Elsevier, vol. 43(7), pages 1211-1236, June.
    5. Denizer Cevdet A. & Iyigun Murat F. & Owen Ann, 2002. "Finance and Macroeconomic Volatility," The B.E. Journal of Macroeconomics, De Gruyter, vol. 2(1), pages 1-32, October.
    6. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    7. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
    8. Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
    9. Douglas Gollin & Steven Parente & Richard Rogerson, 2003. "Structural Transformation and Cross-Country Income Differences," Levine's Working Paper Archive 506439000000000259, David K. Levine.
    10. Mellor, John W & Johnston, Bruce F, 1984. "The World Food Equation: Interrelations among Development, Employment, and Food Consumption," Journal of Economic Literature, American Economic Association, vol. 22(2), pages 531-74, June.
    11. Shang-Jin Wei, 1997. "Why is Corruption So Much More Taxing Than Tax? Arbitrariness Kills," NBER Working Papers 6255, National Bureau of Economic Research, Inc.
    12. Leibenstein, Harvey, 1973. "Competition and X-Efficiency: Reply," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 765-77, May-June.
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