Does Size Matter? Corruption, Scale and Uncertainty

Gonzalo F Forgues-Puccio, Ibrahim Mike Okumu

    Research output: Other contribution


    We study the role of the size of the economy in mitigating the impact of public sector corruption on economic development. The analysis is based on a dynamic general equilibrium model in which growth occurs endogenously through the invention of new intermediate goods that are used in the production of output. Potential innovators decide to enter the market considering the fraction of future profits that may be lost to corruption. We find that depending on the predictability of bribes, the size of the economy may be an important factor in determining the effects of corruption on innovation and economic growth.
    Original languageEnglish
    Typeworking paper
    Number of pages22
    Publication statusPublished - Jul 2012

    Publication series

    NameCDMA Discussion Paper
    PublisherUniversity of St Andrews


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