Corruption, Public Investment, and Growth

Released on by Mr.Hamid Reza Davoodi
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  • Corruption, Public Investment, and Growth Book Detail

  • Author : Mr.Hamid Reza Davoodi
  • Release Date : 1997-10-01
  • Publisher : International Monetary Fund
  • Genre : Business & Economics
  • Pages : 24
  • ISBN 13 : 145192951X
  • File Size : 23,23 MB
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Corruption, Public Investment, and Growth by Mr.Hamid Reza Davoodi PDF Summary

Book Description: Corruption, particularly political or “grand” corruption, distorts the entire decision-making process connected with public investment projects. The degree of distortions is higher with weaker auditing institutions. The evidence presented shows that higher corruption is associated with (i) higher public investment; (ii) lower government revenues; (iii) lower expenditures on operations and maintenance; and (iv) lower quality of public infrastructure. The evidence also shows that corruption increases public investment while reducing its productivity. These are five channels through which corruption lowers growth. An implication is that economists should be more restrained in their praise of high public sector investment, especially in countries with high corruption.

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