Does Size Matter? Corruption, Scale and Uncertainty

Gonzalo F Forgues-Puccio; Ibrahim Mike Okumu

Does Size Matter? Corruption, Scale and Uncertainty

Gonzalo F Forgues-Puccio, Ibrahim Mike Okumu

Research output: Other contribution

Abstract

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 language	English
Type	working paper
Number of pages	22
Publication status	Published - Jul 2012

Publication series

Name	CDMA Discussion Paper
Publisher	University of St Andrews
No.	1207

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Cite this

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title = "Does Size Matter? Corruption, Scale and Uncertainty",

abstract = "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.",

author = "Forgues-Puccio, \{Gonzalo F\} and Okumu, \{Ibrahim Mike\}",

note = "The paper was invited to revise and resubmit by the Journal of Economic Behaviour and Organisation in December 2012.",

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language = "English",

series = "CDMA Discussion Paper",

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AU - Forgues-Puccio, Gonzalo F

AU - Okumu, Ibrahim Mike

N1 - The paper was invited to revise and resubmit by the Journal of Economic Behaviour and Organisation in December 2012.

PY - 2012/7

Y1 - 2012/7

N2 - 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.

AB - 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.

UR - http://www.st-andrews.ac.uk/economics/CDMA/papers/wp1207.pdf

M3 - Other contribution

T3 - CDMA Discussion Paper

ER -

Does Size Matter? Corruption, Scale and Uncertainty

Abstract

Publication series

UN SDGs

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