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Corruption

Revision as of 06:40, 8 September 2013 by WinSysop (talk | contribs)

Corruption is negatively correlated with investment and political stability[1]


C = R+D-A[2]

In the above equation, C stands for corruption, R for economic rent, D for discretionary powers, and A for accountability. The equation states that the more opportunities for economic rent (R) exist in a country, the larger will be the corruption. Similarly, the greater the discretionary powers (D) granted to administrators, the greater will be the corruption. However, the more administrators are held accountable (A) for their actions, the less will be the corruption, and hence a minus sign in front of A.1

References

  1. Paolo Mauro, 1995, Corruption and growth, The Quarterly Journal of Economics
  2. Klitgaard 1998