Does Corruption Affect Income Inequality and Poverty?

Author/Editor:

Sanjeev Gupta

Publication Date:

May 1, 1998

Electronic Access:

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Disclaimer: 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

Summary:

This paper demonstrates that high and rising corruption increases income inequality and poverty by reducing economic growth, the progressivity of the tax system, the level and effectiveness of social spending, and the formation of human capital, and by perpetuating an unequal distribution of asset ownership and unequal access to education. These findings hold for countries with different growth experiences, at different stages of development, and using various indices of corruption. An important implication of these results is that policies that reduce corruption will also lower income inequality and poverty.

Series:

Working Paper No. 98/76

Subject:

English

Publication Date:

May 1, 1998

ISBN/ISSN:

9781451849844/1018-5941

Stock No:

WPIEA0761998

Format:

Paper

Pages:

41

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