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Corruption, Productivity and Transition

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  • Geoffrey Wyatt

Abstract

The level of productivity is correlated across countries with measures of (lack of) corruption, but this appears to be due to a common association of these variables with measures of social infrastructure, here measured by a combination of governance indexes labelled "rule of law" and "government effectiveness". Econometric use of instruments establishes that causation runs from social infrastructure to productivity. Socialism has had a positive direct effect on productivity but one that is dominated by a negative indirect effect via social infrastructure.

Suggested Citation

  • Geoffrey Wyatt, 2002. "Corruption, Productivity and Transition," CERT Discussion Papers 0205, Centre for Economic Reform and Transformation, Heriot Watt University.
    • Handle: RePEc:hwe:certdp:0205
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    File URL: http://www2.hw.ac.uk/sml/downloads/cert/wpa/2002/dp0205.pdf
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    References listed on IDEAS

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    1. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    2. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    3. Robert J. Barro & Paul Romer, 1993. "Economic Growth (1992)," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
    4. Hellman, Joel S. & Jones, Geraint & Kaufmann, Daniel & Schankerman, Mark, 2000. "Measuring governance, corruption, and State capture - how firms and bureaucrats shape the business environment in transition economies," Policy Research Working Paper Series 2312, The World Bank.
    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    6. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    7. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 739-767.
    8. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
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    Cited by:

    1. Takahiro Sato & Atsushi Kato, 2014. "Greasing the Wheels? The Effect of Corruption in Regulated Manufacturing Sectors of India," Discussion Paper Series DP2014-07, Research Institute for Economics & Business Administration, Kobe University.
    2. Atsushi Kato & Takahiro Sato, 2014. "The effect of corruption on the manufacturing sector in India," Economics of Governance, Springer, vol. 15(2), pages 155-178, May.

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    More about this item

    Keywords

    corruption; governance; productivity; social infrastructure; transition;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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