{"title":"Impact of inter-country corruption differences on wages and economic growth","authors":"Óscar Afonso, Mafalda Pinho","doi":"10.1007/s10644-024-09662-5","DOIUrl":null,"url":null,"abstract":"<p>Theoretically and numerically, this paper attempts to examine the macroeconomic effects of corruption by using the two-country directed technical change model. At a single-country level, an increase in corruption levels in one country leads to an intra-country decrease in the demand for labor and wages and a permanent slowdown of technological-knowledge progress and economic growth. At the inter-country level, a country-specific increase in corruption enlarges inter-country wage and technological-knowledge gaps. Overall, higher corruption levels in one country are detrimental to global economic growth. Through calibration, it is shown that when the differences between the corruption of non-corrupt and corrupt countries increase: (1) economic growth is mainly stimulated in the corrupt countries India, Mexico, and Brazil; (2) the lowest wage inequality compared to non-corrupt countries is observed in the corrupt countries Greece, Portugal, and Spain.</p>","PeriodicalId":46127,"journal":{"name":"Economic Change and Restructuring","volume":"25 1","pages":""},"PeriodicalIF":4.0000,"publicationDate":"2024-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Change and Restructuring","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s10644-024-09662-5","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Theoretically and numerically, this paper attempts to examine the macroeconomic effects of corruption by using the two-country directed technical change model. At a single-country level, an increase in corruption levels in one country leads to an intra-country decrease in the demand for labor and wages and a permanent slowdown of technological-knowledge progress and economic growth. At the inter-country level, a country-specific increase in corruption enlarges inter-country wage and technological-knowledge gaps. Overall, higher corruption levels in one country are detrimental to global economic growth. Through calibration, it is shown that when the differences between the corruption of non-corrupt and corrupt countries increase: (1) economic growth is mainly stimulated in the corrupt countries India, Mexico, and Brazil; (2) the lowest wage inequality compared to non-corrupt countries is observed in the corrupt countries Greece, Portugal, and Spain.
期刊介绍：
Economic Change and Restructuring has been accepted for SSCI and will get its first Impact Factor in 2020!Since the early 1990s fundamental changes in the world economy, under the auspices of increasing globalisation, have taken place
On one hand, the disappearance of the centrally planned economies and the progressive formation of market-oriented economies, have brought about countless systematic changes, where new economic structures, institutions, competences and skills involve complex processes, changes which are still underway and which necessitate adaptation and restructuring to form competitive market economies.
On the other hand, many developing economies are making great strides as regards economic reform and liberalisation, and are emerging as new global players. They show an innovative capacity to position themselves in the global economy and to compete with industrialised countries, which are generally believed to be witnessing the rapid erosion of their established positions. These developments are accompanied by the exacerbation of the world competition.
Both processes involve transition and the emerging economies, in searching for a new role and scope for public policies and for a new balance between public and private partnership, seem to currently be converging, especially with respect to the policies needed to create appropriate and effective market institutions and integrated reform policies, and to increase the standards of the population''s education levels.
Thus, liberalisation and development policies, in attempting to strike a difficult balance between social and environmental needs, must be integrated more coherently. This complexity calls for new analytical and empirical approaches that can explain these new phenomena, which often go beyond the over-simplified facts and conventional ''wisdom'' that emerged at the start of the transition in the early 1990s.
Economic Change and Restructuring (formerly ''Economics of Planning''), by keeping abreast of developments affecting both transitional and emerging economies, is aimed to attract original empirical and policy analysis contributions that are focused on various issues, including macroeconomic analysis, fiscal issues, finance and banking, industrial and trade development, and regional and local development issues.
The journal aspires to publish cutting edge research and to serve as a forum for economists and policymakers working in these fields.Officially cited as: Econ Change Restruct
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