Governance, productivity and economic development

Cuong Le Van, Ngoc-Sang Pham, Thi Kim Cuong Pham and Binh Tran-Nam
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Cuong Le Van: CNRS, PSE, CES
Ngoc-Sang Pham: EM Normandie
Thi Kim Cuong Pham: EconomiX
Binh Tran-Nam: RMIT

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Abstract: This paper explores the interplay between transfer policies, R\&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal revenues, and undertakes public investment (in R\&D, infrastructure, etc.). Corruption is modeled as a fraction of tax revenues that is siphoned off and removed from the economy. We first establish the existence of a political-economic equilibrium. Then, using an analytically tractable framework with two private agents, we examine the effects of corruption and evaluate the impact of various policies, including redistribution and innovation-led strategies.

Date: 2025-07
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2507.13099

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