IMF Working Papers

The Persistence of Corruption and Slow Economic Growth

By Paolo Mauro

November 1, 2002

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Paolo Mauro. The Persistence of Corruption and Slow Economic Growth, (USA: International Monetary Fund, 2002) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

There is increasing recognition that corruption has substantial, adverse effects on economic growth. But if the costs of corruption are so high, why don’t countries strive to improve their institutions and root out corruption? Why do many countries appear to be stuck in a vicious circle of widespread corruption and low economic growth, often accompanied by ever-changing governments through revolutions and coups? A possible explanation is that when corruption is widespread, individuals do not have incentives to fight it even if everybody would be better off without it. Two models involving strategic complementarities and multiple equilibria attempt to illustrate this formally.

Subject: Civil service, Corruption, Crime, Economic sectors, Expenditure, Labor, Public sector

Keywords: Bribe rate, Civil service, Corruption, Economic growth, Government collapse, Government intervention, Government's policy, Incumbent government, Multiple equilibria, Persistence, Production function, Public sector, Strategic complementarities, WP

Publication Details

  • Pages:

    23

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2002/213

  • Stock No:

    WPIEA2132002

  • ISBN:

    9781451874952

  • ISSN:

    1018-5941

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