Corruption, development and demography

This paper presents an analysis of the joint, endogenous determination of bureaucratic corruption, economic development and demographic transition. The analysis is based on an overlapping generations model in which reproductive agents mature safely through two periods of life and face a probability of surviving for a third period. This survival probability depends on the provision of public goods and services which may be compromised by corrupt activities on the part of public officials. The dynamic general equilibrium of the economy is characterised by multiple development regimes, transition between which may or may not be feasible. In accordance with empirical evidence, the model predicts that low (high) levels of development are associated with high (low) levels of corruption and low (high) rates of life expectancy.