Corruption, Growth and Political Regimes: Cross Country Evidence

30 Pages Posted: 2 Nov 2005

See all articles by Facundo Sepulveda

Facundo Sepulveda

University of Santiago, Chile

Fabio Mendez

University of Arkansas - Sam M. Walton College of Business

Abstract

This paper studies the effects of corruption on long run growth incorporating measures of political freedom as a key determinant of the relationship. Unlike previous empirical studies, we find evidence of a non-monotonic relationship between corruption and growth after controlling for several other economic variables and restricting the sample to those countries considered to be free. Our results indicate that the growth-maximizing level of corruption is significantly greater than zero, with corruption beneficial for economic growth at low levels of incidence and detrimental at high levels of incidence.

Keywords: corruption, growth

Suggested Citation

Sepulveda, Facundo and Mendez, Fabio, Corruption, Growth and Political Regimes: Cross Country Evidence. European Journal of Political Economy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=830384

Facundo Sepulveda

University of Santiago, Chile ( email )

Santiago
Chile

HOME PAGE: http://www.fsp.cl

Fabio Mendez (Contact Author)

University of Arkansas - Sam M. Walton College of Business ( email )

Fayetteville, AR 72701
United States

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