The Theoretical Analysis and Empirical Study on Public Investment Corruption and Economic Growth

摘要

In this paper, we carry on the theoretical analysis and empirical study on public investment corruption and economic growth. Our methodology improves on previous research on this topic by explicitly recognizing the role of simultaneity between public investment corruption and growth. Our primary results are twofold. First, corruption increases public investment. Second, public investment corruption reduces the returns to public investment and makes it ineffective in raising economic growth.