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Governance, productivity and economic development

Author

Listed:
  • Cuong Le Van
  • Ngoc Sang Pham
  • Thi Kim Cuong Pham
  • Binh Tran-Nam

Abstract

This paper explores the interplay between transfer policies, R&D, corruption, and economic development using a general equilibrium model with hetero-generous agents and a government. The government collects taxes, redistributesfiscal revenues, and undertakes public investment (in R&D, infrastructure, etc.).Corruption is modeled as a fraction of tax revenues that is siphoned off and removed from the economy. We first establish the existence of a political-economicequilibrium. Then, using an analytically tractable framework with two privateagents, we examine the effects of corruption and evaluate the impact of variouspolicies, including redistribution and innovation-led strategies.

Suggested Citation

  • Cuong Le Van & Ngoc Sang Pham & Thi Kim Cuong Pham & Binh Tran-Nam, 2025. "Governance, productivity and economic development," EconomiX Working Papers 2025-35, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2025-35
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    References listed on IDEAS

    as
    1. Tapan Mitra, 1998. "On Equilibrium Dynamics Under Externalities in a Model of Economic Development," The Japanese Economic Review, Japanese Economic Association, vol. 49(2), pages 85-107, June.
    2. Kanat Abdulla, 2021. "Corrosive effects of corruption on human capital and aggregate productivity," Kyklos, Wiley Blackwell, vol. 74(4), pages 445-462, November.
    3. Cuong Le Van & Ngoc-Sang Pham, 2016. "Intertemporal equilibrium with financial asset and physical capital," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(1), pages 155-199, June.
    4. Lisa Morhaim & Charles-Henri Dimaria & Cuong Le Van, 2002. "The discrete time version of the Romer model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(1), pages 133-158.
    5. d'Albis, Hippolyte & Le Van, Cuong, 2006. "Existence of a competitive equilibrium in the Lucas (1988) model without physical capital," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 46-55, February.
    6. Stefano Bosi & David Desmarchelier & Thai Ha‐Huy, 2022. "Wheels and cycles: Suboptimality and volatility of corrupted economies," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(4), pages 440-460, December.
    7. Benjamin A. Olken & Rohini Pande, 2012. "Corruption in Developing Countries," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 479-509, July.
    8. GOURDEL, Pascal & NGOC, Liem Hoang & LE VAN, Cuong & MAZAMBA, Tédié, 2004. "Equilibrium and competitive equilibrium in a discrete-time Lucas model," LIDAM Reprints CORE 1742, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. repec:hal:pseose:hal-01302382 is not listed on IDEAS
    10. Jochen Hartwig & Jan‐Egbert Sturm, 2025. "Revisiting the impact of corruption on income inequality worldwide," Kyklos, Wiley Blackwell, vol. 78(1), pages 206-242, February.
    11. Demir, Firat & Hu, Chenghao & Liu, Junyi & Shen, Hewei, 2022. "Local corruption, total factor productivity and firm heterogeneity: Empirical evidence from Chinese manufacturing firms," World Development, Elsevier, vol. 151(C).
    12. Pascal Gourdel & Liem Hoang Ngoc & Cuong Le Van & Tédié Mazamba, 2004. "Equilibrium and Competitive Equilibrium in a Discrete-Time Lucas Model," Post-Print halshs-00119011, HAL.
    13. Bosi, Stefano & Le Van, Cuong & Phung, Giang, 2025. "Economic growth with brown or green capital," Journal of Mathematical Economics, Elsevier, vol. 117(C).
    14. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 681-712.
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    Keywords

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    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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