Corruption, Income Distribution, and Growth
AbstractThis paper uses an encompassing framework developed by Murphy et al. (1991, 1993) to study corruption and how it affects income distribution and growth. We find that (1) corruption affects income distribution in an inverted U-shaped way, (2) corruption alone also explains a large proportion of the Gini differential across developing and industrial countries, and (3) that even after correcting for measurement errors, corruption still retards economic growth. But the effect is far less pronounced than the one found in Mauro (1995). Moreover, corruption alone explains little of the continental growth differentials. In countries where the asset distribution is less equal, corruption is associated with a smaller increase in income inequality and a larger drop in growth rates.
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Bibliographic InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 472.
Length: 42 pages
Date of creation: 2000
Date of revision:
Publication status: Published in Economics & Politics, Volume 12, Issue 2, pages 155¨C182, July 2000
Corruption; income inequality; economic growth;
Other versions of this item:
- D3 - Microeconomics - - Distribution
- K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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- Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June Cita.
- Tao Zhang & Heng-fu Zou, 2001.
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CEMA Working Papers
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- Tao Zhang & Heng-fu Zou, 1996. "Fiscal decentralization, public spending, and economic growth in China," Policy Research Working Paper Series 1608, The World Bank.
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