Economics Commons^™

Corruption And Productivity, Chris Kelly

All Theses

Corruption is suggested to have a negative impact on productivity and thus growth. Several studies have studied the relationship closely, including Hall and Jones (1999) and Lambsdorff (2003). This paper seeks to build on their foundation and specify a new and robust model by looking at the effect of corruption controls on total factor productivity through a two-stage least squares regression. Since it is through public institutions that corruption manifests, also examined are differences between `inclusive' and `extractive' institutions. Also important is the degree to which a state is centralized. Extraction by way of corrupt institutions differs in highly centralized …