Do the effects of corruption upon growth differ between democracies and autocracies?

Andreas Assiotis and Kevin Sylwester

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: Many studies examining whether corruption lowers economic growth do not consider if the effects of corruption differ across countries. Whether corruption produces the same effects everywhere or whether its effects are conditional on some country characteristics is an important question. We investigate the association between corruption and growth, where the marginal impact of corruption is allowed to differ across democratic and non democratic regimes. Using cross-country, annual data from 1984 to 2007, we regress growth on corruption, democracy, and their interaction. We find that decreases in corruption raise growth but more so in authoritarian regimes. Possible reasons are in autocracies corruption causes more uncertainty, is of a more pernicious nature, or is less substitutable with other forms of rent seeking.

Keywords: Economic Growth; Democracy; Corruption (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-03
New Economics Papers: this item is included in nep-cdm, nep-dev and nep-pol
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:06-2013

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