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Do the effects of corruption upon growth differ between democracies and autocracies?

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  • Andreas Assiotis
  • Kevin Sylwester

Abstract

Many studies examining whether corruption lowers economic growth do not consider if the effects of corruption differ across countries. Whether corruption produces the same effects everywhere or whether its effects are conditional on some country characteristics is an important question. We investigate the association between corruption and growth, where the marginal impact of corruption is allowed to differ across democratic and non democratic regimes. Using cross-country, annual data from 1984 to 2007, we regress growth on corruption, democracy, and their interaction. We find that decreases in corruption raise growth but more so in authoritarian regimes. Possible reasons are in autocracies corruption causes more uncertainty, is of a more pernicious nature, or is less substitutable with other forms of rent seeking.

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  • Andreas Assiotis & Kevin Sylwester, 2013. "Do the effects of corruption upon growth differ between democracies and autocracies?," University of Cyprus Working Papers in Economics 06-2013, University of Cyprus Department of Economics.
    • Handle: RePEc:ucy:cypeua:06-2013
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    Cited by:

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    2. Leonardo A. Lanzona Jr., 2019. "Agrarian Reform and Democracy: Lessons from the Philippine Experience," Millennial Asia, , vol. 10(3), pages 272-298, December.
    3. Leonardo A. Rocha & Maria Ester S. Dal Poz & Patrícia V.P.S. Lima & Ahmad S. Khan & Napiê G. A. Silva, 2019. "Corruption, bureaucracy and other institutional failures: the “cancer†of innovation and development," Economics Bulletin, AccessEcon, vol. 39(3), pages 1740-1754.
    4. David N. Laband & John P. Sophocleus, 2019. "Measuring rent-seeking," Public Choice, Springer, vol. 181(1), pages 49-69, October.
    5. Eunji Kim & Yoonhee Ha & Sangheon Kim, 2017. "Public Debt, Corruption and Sustainable Economic Growth," Sustainability, MDPI, vol. 9(3), pages 1-30, March.
    6. Nguyen, Ngoc Anh & Nguyen, Ngoc-Minh & Tran-Nam, Binh, 2014. "Corruption and economic growth, with a focus on Vietnam," MPRA Paper 84728, University Library of Munich, Germany, revised 2015.

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    Economic Growth; Democracy; Corruption;
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