Corruption and Development: Explaining the Evidence

This paper presents a theoretical account of some empirical observations about the relationship between public sector corruption and economic development. These observations include both important regularities and notable anomalies which indicate that there is rather more to this relationship than one is often led to believe. The paper brings together some previous work for the purpose of providing a unified account of the issues involved within the context of a single analytical framework. These include the causality between corruption and development, the persistence of corruption and poverty, the diversity of corruption across countries and the differential impact of corruption in different economies.