Growth and Development Under Alternative Corruption Regimes

Empirical observation suggests that not all countries of the world have suffered as a result of widespread corruption. Whilst many countries have undoubtedly been damaged considerably, others appear to have coped well - in some cases, very well - with the problem. The analysis that follows seeks to provide an explanation for this puzzle. It does so by differentiating alternative types of corruption regime according to the way that corruption is practised. Speci?cally, we distinguish between organised and disorganised, collusive and non collusive corruption. This gives four possible scenarios, the implications of which are compared and contrasted to provide a ranking of regimes in terms of their impact on growth. We ?nd that the least (most) damaging regime is one in which corruption is both organised and collusive (disorganised and non-collusive), as broadly characterises the situation in China and its fast-growing neighbours (many African countries).