Who Gains from Non-Collusive Corruption?

Manuel Oechslin () and Reto Foellmi

No 159, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: We explore the impact of non-collusive corruption on the wealth distribution. We show that the distributional consequences depend crucially on the degree of capital market imperfections. With perfect capital markets, corruption does not redistribute wealth within the private sector. However, if borrowing is limited, members of the ''middle class'' suffer most since bribery drives them out of the capital market. This makes access to credit easier for wealthy individuals such that a group of them even wins. Finally, we provide cross-country evidence showing that a high level of corruption and a polarization of the distribution go indeed hand in hand.

Keywords: corruption; income inequality; development (search for similar items in EconPapers)
JEL-codes: D31 D73 O11 (search for similar items in EconPapers)
Date: 2003-06-04
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: Who gains from non-collusive corruption? (2007)
Working Paper: Who Gains From Non-Collusive Corruption?
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:ac2003:159

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