The Rationale of Transparent Public Finances — Impacts on Economic Growth Yvan Lengwiler University of Basel Transparency Days 2007 Belgrade

empirical correlations  smaller per capita income corruption

% of population who reports having paid bribes in the last year corruption and wealth

Corruption Perception Index Source: Transparency International [

the poor have bureaucrats" (W. Easterly) "The rich have markets,

empirical correlations  less equal distribution of income  weaker public finances  higher debt  lower per capita tax revenues  weaker investments  less formation of human capital (education and health care)  lower trend growth rate corruption  smaller per capita income

The East Asian Paradox organization of corruption network gov't with short horizon (roving bandits) gov't with long horizon (stationary bandits) strong gov't who exerts monopoly power over corruption networks business-politicians in hyper- presidential regimes (Argentina, Brazil, Mexico) East Asia's states establish beneficial relations with capitalists in exchange for bribes (China, Indonesia, Korea, Thailand, Japan) weak fragmented government, multiple independent monopolists some African regimes with substantial political instability India and the Philippines in the late Marcos and post-Marcos era Source: Rock and Bonnet (2004).

which way does the causation go? low income low growth weak investments little human capital etc. corruption

vicious and virtuous circle weak institutions corruption weak growth weak property rights