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Is there a direct effect of corruption on growth?

  • Dzhumashev, Ratbek

Recent empirical studies find that the direct effect of corruption on growth is statistically insignificant. However, there exists a discrepancy between these results and the intuition that corruption reduces over-all productivity, because total factor productivity also depends on the quality of institutions and their efficiency. The current paper addresses this issue and offers a new perspective on growth effects of corruption and shows that direct and indirect growth effects of corruption can be statistically significant. Moreover, the empirical results confirm the existence of both negative and positive growth effect of corruption.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18489.

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Date of creation: 09 Nov 2009
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Handle: RePEc:pra:mprapa:18489
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