Corruption and Innovation

12 Pages Posted: 24 Feb 2008

See all articles by Marcelo Veracierto

Marcelo Veracierto

Federal Reserve Bank of Chicago - Research Department


In this article, the author illustrates how corruption can affect an industry's rate of innovation. An interesting result of the analysis is that, under certain parameter ranges, small increases in the penalties to corruption or the effectiveness of detection can result in large increases in product innovation.

Keywords: corruption; bribes; illegal behavior; innovation; Organizational Behavior; Transaction Costs; Property Rights; Illegal Behavior and the Enforcement of Law; Economics of Regulation; Innovation and Invention: Processes and Incentives; Government Policy

Suggested Citation

Veracierto, Marcelo, Corruption and Innovation. Economic Perspectives, Vol. 32, No. 1, 2008, Available at SSRN:

Marcelo Veracierto (Contact Author)

Federal Reserve Bank of Chicago - Research Department ( email )

230 South LaSalle Street
Chicago, IL 60604-1413
United States
(312) 322-6595 (Phone)

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