Role Of Corruption In Economic Growth

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Mauro argues why corruption is particularly serious in some countries and becomes a vicious circle with low economic growth. It argues that when the corruption of a region prevails, the chances of being caught and punished are reduced, leading individuals to spend more time on corruption, which he calls the strategy complements and combines this concept with Barr’s construction which is the production function of joining government spending. The model results show that corruption and economic growth will show a complex equilibrium, that is, clean and high economic growth rate will have a good balance; serious corruption and low economic growth rate will have a bad balance. This is due to the low probability of corporal punishment in the area;…show more content…
The reasons for the lack of administrative efficiency in developing countries generally include the lack of effective public pressure on bureaucrats to promote development or the lack of commercial interest in the decision-making process; the Government does not consider the value come from economic affairs or innovation. Bureaucrats may regard companies as competitors of core power and hold hostile attitudes towards them. In addition, most of the governments maintain the status quo as the primary goal, focusing on strengthening military power and expansion of social control, but will stop the economic growth. Therefore, when the state dominates the economic development, the enterprise will have the following beneficial effect through the bribery (Leff,…show more content…
But with the gradual development of the economy to a certain scale, people 's living standards, and education level, people begin to pay attention to the ability of the government and their own property rights protection, corruption that bring the effect of lubrication will be reduced slowly. And finally will turn to stop investment in capital, as well as reduce the aid from international, and finally, bring negative impact on economic growth. However, the International Organization for the Promotion of Transparency in 2006 published the latest corruption impression index also pointed out that although in the past decade countries anti-corruption legislation has great achievements, but so far has to improve the world 's corruption which causes the problem of survival in poor

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