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Corruption and Sustainable Development

  • Aidt, T.S.

This paper studies the relationship between corruption and sustainable development in a sample of 110 countries between 1996 and 2007. Sustainability is measured by growth in genuine wealth per capita. The empirical analysis consistently finds that cross-national measures of perceived and experienced corruption reduce growth in genuine wealth per capita. In contrast to the evidence on the relationship between corruption and growth in GDP per capita, the negative correlation between a wide range of different corruption indices and growth in genuine wealth per capita is very robust and is of economic as well as of statistical significance. We relate the finding to the literature on the resource curse and demonstrate that rampant corruption can put an economy on an unsustainable path along which its capital base is being eroded.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1061.

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Date of creation: 16 Nov 2010
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Handle: RePEc:cam:camdae:1061
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  1. Catherine Norman, 2009. "Rule of Law and the Resource Curse: Abundance Versus Intensity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(2), pages 183-207, June.
  2. Guerriero, C., 2009. "Democracy, Judicial Attitudes and Heterogeneity: The Civil Versus Common Law Tradition," Cambridge Working Papers in Economics 0917, Faculty of Economics, University of Cambridge.
  3. Aidt, Toke & Dutta, Jayasri & Sena, Vania, 2008. "Governance regimes, corruption and growth: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 195-220, June.
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  7. Toke S. Aidt, 2003. "Economic analysis of corruption: a survey," Economic Journal, Royal Economic Society, vol. 113(491), pages F632-F652, November.
  8. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2004. "Institutions and the Resource Curse," DEGIT Conference Papers c009_012, DEGIT, Dynamics, Economic Growth, and International Trade.
  9. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
  10. Theo Eicher & Andreas Leukert, 2009. "Institutions and Economic Performance: Endogeneity and Parameter Heterogeneity," Working Papers UWEC-2007-16-P, University of Washington, Department of Economics.
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  12. Paldam, Martin, 2002. "The cross-country pattern of corruption: economics, culture and the seesaw dynamics," European Journal of Political Economy, Elsevier, vol. 18(2), pages 215-240, June.
  13. James A. Robinson & Ragnar Torvik & Thierry Verdier, 2003. "Politcal Foundations of the Resource Curse," DELTA Working Papers 2003-33, DELTA (Ecole normale supérieure).
  14. van der Ploeg, Frederick & Poelhekke, Steven, 2010. "The pungent smell of "red herrings": Subsoil assets, rents, volatility and the resource curse," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 44-55, July.
  15. Del Monte, Alfredo & Papagni, Erasmo, 2001. "Public expenditure, corruption, and economic growth: the case of Italy," European Journal of Political Economy, Elsevier, vol. 17(1), pages 1-16, March.
  16. Christa N. Brunnschweiler & Erwin H. Bulte, 2006. "The Resource Curse Revisited and Revised: A Tale of Paradoxes and Red Herrings," CER-ETH Economics working paper series 06/61, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  17. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
  18. Papyrakis, Elissaios & Gerlagh, Reyer, 2006. "Resource windfalls, investment, and long-term income," Resources Policy, Elsevier, vol. 31(2), pages 117-128, June.
  19. Sambit Bhattacharyya & Roland Hodler, 2008. "Natural Resources, Democracy and Corruption," OxCarre Working Papers 020, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
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  21. Eric Neumayer, 2003. "Does the ‘Resource Curse’ hold for Growth in Genuine Income as well?," Others 0312002, EconWPA, revised 18 May 2004.
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  23. Dasgupta, Partha & M Ler, Karl-G Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 69-93, February.
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  25. Egger, Peter & Winner, Hannes, 2005. "Evidence on corruption as an incentive for foreign direct investment," European Journal of Political Economy, Elsevier, vol. 21(4), pages 932-952, December.
  26. Gundlach, Erich & Paldam, Martin, 2009. "The transition of corruption: From poverty to honesty," Economics Letters, Elsevier, vol. 103(3), pages 146-148, June.
  27. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
  28. 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.
  29. Hamilton, Kirk & Clemens, Michael, 1999. "Genuine Savings Rates in Developing Countries," World Bank Economic Review, World Bank Group, vol. 13(2), pages 333-56, May.
  30. Aidt, T. & Dutta, J. & Loukoianova, E., 2003. "Policy Myopia," Cambridge Working Papers in Economics 0344, Faculty of Economics, University of Cambridge.
  31. James E. Alt & David Dreyer Lassen, 2002. "The Political Economy of Institutions and Corruption in American States," EPRU Working Paper Series 02-16, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  32. repec:oup:qjecon:v:119:y:2004:i:2:p:678-704 is not listed on IDEAS
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