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Corruption and economic growth in Lebanon

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Author Info
Farida, Moe
Ahmadi-Esfahani, Fredoun
Abstract

This paper seeks to examine the impact of corruption on economic growth in Lebanon. Using a neoclassical model, we hypothesise that corruption reduces the country's standard of living as measured by real per capita GDP. We show that corruption deters growth indirectly through reducing the factor input productivity in a Cobb-Douglas production function. We provide empirical evidence suggesting that corruption increases inefficiencies in government expenditure and reduces investment and human capital productivity, leading to a negative impact on output. The implications of the analysis are explored.

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Publisher Info
Paper provided by Australian Agricultural and Resource Economics Society in its series 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia with number 6043.

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Date of creation: 2008
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Handle: RePEc:ags:aare08:6043

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Related research
Keywords: corruption; economic growth; investment; human capital; government expenditure; foreign aid; Institutional and Behavioral Economics; Labor and Human Capital; Public Economics;

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  1. Paolo Mauro, 1996. "The Effects of Corruption on Growth, Investment, and Government Expenditure," IMF Working Papers 96/98, International Monetary Fund.
  2. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
  3. Isaac Ehrlich & Francis T. Lui, 1999. "Bureaucratic Corruption and Endogenous Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S270-S293, December. [Downloadable!] (restricted)
  4. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  5. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September. [Downloadable!] (restricted)
  6. David Stasavage & Cécile Daubrée, 1998. "Determinants of Customs Fraud and Corruption: Evidence from Two African Countries," OECD Development Centre Working Papers 138, OECD, Development Centre. [Downloadable!]
  7. Daron Acemoglu & Thierry Verdier, 2000. "The Choice between Market Failures and Corruption," American Economic Review, American Economic Association, vol. 90(1), pages 194-211, March. [Downloadable!] (restricted)
    Other versions:
  8. Bigsten, Arne & Moene, Karl Ove, 1996. "Growth and Rent Dissipation: The Case of Kenya," Journal of African Economies, Oxford University Press, vol. 5(2), pages 177-98, June.
  9. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August. [Downloadable!] (restricted)
  10. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-14, May. [Downloadable!] (restricted)
  11. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March. [Downloadable!] (restricted)
  12. Lui, Francis T, 1985. "An Equilibrium Queuing Model of Bribery," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 760-81, August. [Downloadable!] (restricted)
  13. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June. [Downloadable!] (restricted)
  14. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June. [Downloadable!] (restricted)
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