It this difficult to overstate the economic and social significance of corruption. Yet, the lack of reliable and systematic data has kept corrup- tion out of the research agenda of empirical economists. This allowed speculation to include such basic issues as whether corruption is good or bad for growth or whether corruption is de- termined by economic or cultural forces. Re- cently, however, Paolo Mauro (1995) used cross-country subjective measures of corruption to show that corruption is negatively associated with private investment and growth. Our paper switches attention from the consequences of corruption to the causes of corruption.
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