Is Corruption an Efficient Grease?

Pierre-Guillaume Méon and Laurent Weill

World Development, 2010, vol. 38, issue 3, 244-259

Abstract: Summary This paper tests whether corruption may be an efficient grease in the wheels of an otherwise deficient institutional framework. It analyzes the interaction between aggregate efficiency, corruption, and other dimensions of governance for a panel of 69 countries, both developed and developing. Using two measures of corruption and two other aspects of governance, we observe that corruption is less detrimental to efficiency in countries where institutions are less effective. It may even be positively associated with efficiency in countries where institutions are extremely ineffective. We thus find evidence for the "grease the wheels" hypothesis in its weak and strong forms.

Keywords: governance; corruption; income; aggregate; productivity; efficiency (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (276)

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Working Paper: Is Corruption an Efficient Grease ? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:38:y:2010:i:3:p:244-259

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