Governance regimes, corruption and growth: Theory and evidence

Toke S Aidt (), Jayasri Dutta and Vania Sena

Journal of Comparative Economics, 2008, vol. 36, issue 2, pages 195-220

Abstract: We study the role of political accountability as a determinant of corruption and economic growth. Our model identifies two governance regimes defined by the quality of political institutions and shows that the relationship between corruption and growth is regime specific. We use a threshold model to estimate the impact of corruption on growth where corruption is treated as an endogenous variable. We find two governance regimes, conditional on the quality of political institutions. In the regime with high quality political institutions, corruption has a substantial negative impact on growth. In the regime with low quality institutions, corruption has no impact on growth. Journal of Comparative Economics 36 (2) (2008) 195-220.

Date: 2008
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Working Paper: Governance Regimes, Corruption and Growth: Theory and Evidence (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:jcecon:v:36:y:2008:i:2:p:195-220

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