We analyze the channels through which institutional quality affects the corruption growth nexus. To this end, we develop an endogenous growth model and empirically test its implications. Our sample consists of a panel of 136 developed and developing countries over the period 1984-2015. We show, both theoretically and empirically, that (i) the corruption-growth relation can be subject to nonlinearities highly influenced by countries’ institutional development and (ii) private investment and public spending are two main channels through which institutional quality nonlinearly affects the relation between corruption and economic growth.
|Author:||Réda; Camélia; Patrick , Marakbi; Turcu; Villieu|
|Volume:||2018 1 (3)|
|No. of pages:||5|