Is Corruption an Efficient Grease ?

Pierre-Guillaume Méon and Laurent Weill

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: This paper tests whether corruption can be viewed as an efficient grease in the wheels of an otherwise deficient institutional framework. It does so by analyzing the interaction between aggregate efficiency, corruption, and other dimensions of governance for a panel of 54 countries both developed and developing. Using three measures of corruption and five measures of other aspects of governance, we repeatedly observe that corruption is always detrimental in countries where institutions are effective, but that it may be positively associated with efficiency in countries where institutions are ineffective. We thus find evidence of the grease the wheels hypothesis.

Keywords: Governance; corruption; income; aggregate productivity; efficiency. (search for similar items in EconPapers)
JEL-codes: C33 K4 O43 O47 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-law, nep-pol and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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http://ifs.u-strasbg.fr/large/publications/2008/2008-06.pdf (application/pdf)

Related works:
Journal Article: Is Corruption an Efficient Grease? (2010)
Working Paper: Is corruption an efficient grease? (2010)
Working Paper: Is corruption an efficient grease? (2008)
Working Paper: Is corruption an efficient grease?
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2008-06

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