Debt, corruption, R&D and growth in developing countries

Charles-Henri DiMaria () and Cuong Le van ()

CEPREMAP Working Papers (Couverture Orange) from CEPREMAP

Abstract: This paper analyses optimal paths in a one-sector growth model when the technology is not convex. In such a case, we prove that optimal paths converge to the upper steady state iff the initial wealth is above a critical level. Then we first show that thanks to debt and/or R&D the poverty trap may be avoided. Second, we introduce a distortion: corruption which mostly has dramatic consequences on growth. These results may explain why empirical works lead to the conclusion of non convergence in large cross-country samples.

JEL-codes: C61 D92 (search for similar items in EconPapers)
Date: 1998
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Working Paper: Debt, Corruption, R&D and Growth in Developing Countries (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:cpm:cepmap:9817

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