Corruption, Income Distribution, and Growth

Hongyi Li (), Lixin Xu and Heng-Fu Zou ()

No 472, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: This paper uses an encompassing framework developed by Murphy et al. (1991, 1993) to study corruption and how it affects income distribution and growth. We find that (1) corruption affects income distribution in an inverted U-shaped way, (2) corruption alone also explains a large proportion of the Gini differential across developing and industrial countries, and (3) that even after correcting for measurement errors, corruption still retards economic growth. But the effect is far less pronounced than the one found in Mauro (1995). Moreover, corruption alone explains little of the continental growth differentials. In countries where the asset distribution is less equal, corruption is associated with a smaller increase in income inequality and a larger drop in growth rates.

Keywords: Corruption; income inequality; economic growth (search for similar items in EconPapers)
JEL-codes: D3 K4 O4 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (191)

Published in Economics & Politics, Volume 12, Issue 2, pages 155¨C182, July 2000

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Journal Article: Corruption, Income Distribution, and Growth (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:472

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