Corruption, Institutions and Economic Development

Toke S Aidt ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Many scholarly articles on corruption give the impression that the world is populated by two types of people: the "sanders" and the "greasers". The "sanders" believe that corruption is an obstacle to development, while the "greasers" believe that corruption can (in some cases) foster development. This paper takes a critical look at these positions. It concludes that the evidence supporting the "greasing the wheels hypothesis" is very weak and shows that there is no correlation between a new measure of managers.actual experience with corruption and GDP growth. Instead, the paper uncovers a strong negative correlation between growth in genuine wealth per capita - a direct measure of sustainable development - and corruption. While corruption may have little average effect on the growth rate of GDP per capita, it is a likely source of unsustainable development.

Keywords: Corruption; Growth; Sustainable Development. (search for similar items in EconPapers)
JEL-codes: D78 D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-pol and nep-soc
Date: 2009-04-14
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Journal Article: Corruption, institutions, and economic development (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:cam:camdae:0918

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