Summary This paper analyses the interdependency between political corruption, institutions and growth. The central thesis is that a high level of income will promote corruption in the short run, due to the incentive effect of income on potentially corrupt politicians. Only in the long run income...

This paper analyses the interdependency between political corruption, institutions and growth. The central thesis is that a high level of income will promote corruption in the short run, due to the incentive effect of income on potentially corrupt politicians. Only in the long run income is...