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Distribution and Development in a Model of Misgovernance

  • K Blackburn
  • G F Forgues-Puccio

This paper presents an analysis of bureaucratic corruption, income inequality and economic development. The analysis is based on a dynamic general equilibrium model in which bureaucrats are appointed by the government to implement a redistributive programme of taxes and subsidies designed to benefit the poor. Corruption is reflected in bribery and tax evasion as bureaucrats conspire with the rich in providing false information to the government. In accordance with empirical evidence, the model predicts a positive relationship between corruption and inequality and a negative relationship between corruption and development.

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Paper provided by Economics, The Univeristy of Manchester in its series Centre for Growth and Business Cycle Research Discussion Paper Series with number 42.

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Length: 29 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:man:cgbcrp:42
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