Governance, productivity and economic development

Cuong Le Van, Ngoc Sang Pham, Thi Kim Cuong Pham and Binh Tran-Nam

No 2025-35, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper explores the interplay between transfer policies, R&D, corruption, and economic development using a general equilibrium model with hetero-generous agents and a government. The government collects taxes, redistributesfiscal 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-economicequilibrium. Then, using an analytically tractable framework with two privateagents, we examine the effects of corruption and evaluate the impact of variouspolicies, including redistribution and innovation-led strategies.

Keywords: Corruption; governance; R&D investment; economic development; productivity; general equilibrium. (search for similar items in EconPapers)
JEL-codes: D5 H54 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2025
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