The Economic Costs of Corruption: A Survey and New Evidence

Axel Dreher and Thomas Herzfeld

Public Economics from University Library of Munich, Germany

Abstract: This paper reviews the empirical literature on the economic costs of corruption. Corruption affects economic growth, the level of GDP per capita, investment activity, international trade and price stability negatively. Additionally, it biases the composition of government expenditures. The second part of the paper estimates the effect of corruption on economic growth and GDP per capita as well as on six possible transmission channels. The results of this analysis allows to calculate the total effect of corruption: An increase of corruption by about one index point reduces GDP growth by 0.13 percentage points and GDP per capita by 425 US$.

Keywords: Costs of Corruption; Survey; Empirical Evidence (search for similar items in EconPapers)
JEL-codes: C39 K49 O1 (search for similar items in EconPapers)
Date: 2005-06-02
New Economics Papers: this item is included in nep-afr and nep-law
Note: Type of Document - pdf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (88)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0506/0506001.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0506001

Access Statistics for this paper

More papers in Public Economics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).