Corruption and Development - Why Does Corruption Still Affect Growth?

Abstract

This paper investigates the relationship between corruption and development. By a study of the determinants of the phenomenon as well as its implications on growth, this paper address the corruption challenge faced by governments and policymakers. Based on the theoretical framework of the political economy of development, I argue that even though the causality is not entirely clear, it is however without debate to say that development is necessarily linked with anti-corruption initiatives. If some counterexamples still exist, it is remarkable to see that the vast majority of developed countries did fight corruption at some point. Still, the path to fight corruption is blurry. It is unlikely for a developing country to get rid of the phenomenon on its own, without external help. Finally, according to the classical studies on the quality of institutions, this paper concludes that a strong rule of law and government effectiveness are among the key factors able to fight a corrupt system.