Corruption, Growth, and Public Finances

IMF Working Papers, November 1, 2000

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Corruption, Growth, and Public Finances

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Bibliographic details

• Authors: Vito Tanzi, Hamid R Davoodi
• Published: November 1, 2000
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451859256.001

Summary

• The paper discusses channels through which corruption affects growth, including:
  • the impact of corruption on enterprises,
  • the impact of corruption on the allocation of talent,
  • the impact of corruption on investment.
• The paper also discusses the impact of corruption on some aspects of public finance.

Key findings and themes

• Channels linking corruption to growth:
  • Impact on enterprises (enterprise growth, enterprise restructuring, firm sales, privatized firm, SME).
  • Misallocation of talent (implications for productivity and long-run growth).
  • Effects on investment (including implications for public investment spending and private investment).
• Public finance implications:
  • Interaction with taxes (Consumption taxes, Income tax systems, Value-added tax).
  • Effects on public investment spending and expenditure composition.
  • Relevance for tax policy and tax administration (tax, bribes, corruption).
• Sectoral and country examples (as referenced by keywords):
  • Trade enterprise, Ugandan firm, Global, GDP.

Policy implications and discussion areas

• Areas highlighted for further analysis and policy attention:
  • How corruption alters enterprise behavior and market outcomes.
  • The role of tax systems (Consumption taxes, Income tax systems, Value-added tax) in environments with corruption.
  • Design and protection of public investment spending from corrupt diversion.
  • Implications for SME policy and privatization processes.

Notes

• Disclaimer included in the source: "This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate."

Content based on "Corruption, Growth, and Public Finances", IMF Working Papers, November 1, 2000.

Content in this bundle

• Corruption, Growth, and Public Finances - WP/00/182
  • Corruption, Growth, and Public Finances - WP/00/182 (Markdown version)
  • Corruption, Growth, and Public Finances - WP/00/182 (PDF)