Inequality and Economic Development:The Role of Corruption
This paper presents a model where income inequality negatively affects economic growth through corruption by politicians. While politicians pursue corruption rents that reduce the provision of public goods and sacrifice citizen's welfare, they are also concerned about the political support of citizens to maintain their political power. When inequality among citizens is large, political support is less sensitive to corruption. Therefore, large inequality increases corruption and impedes economic growth. Since corruption is more prevalent in poor countries than rich ones, our argument is consistent with the evidence that shows a negative relationship between inequality and growth in poor countries.
|Date of creation:||Aug 2010|
|Contact details of provider:|| Postal: Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501|
Web page: http://www.kier.kyoto-u.ac.jp/eng/index.html
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:kyo:wpaper:713. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ryo Okui)
If references are entirely missing, you can add them using this form.