Does corruption sand or grease the wheels of economic growth? This column reviews recent research that uses meta-analysis techniques to try to provide more concrete answers to this old-age question. From a unique, comprehensive data base of 460 estimates of the impact of corruption on growth from 41 studies, the main conclusion that emerges is that there is little support for the “greasing the wheels” hypothesis.
Corruption happens and it happens across the world. Although it is more common in poorer economies, corruption exists everywhere. A lingering debate that still provides a powerful research motivation is whether corruptions greases or sands the wheels of economic growth (Bardhan 1997, Pande 2008, Aidt 2009).
Those in favour of the greasing hypothesis argue that corruption facilitates trade that may not have happened otherwise and that it promotes efficiency by allowing private sector agents to circumvent cumbersome regulations (Leff 1964, Huntington 1968, Méon and Weill 2010).
See full Article.
Posts
