Building on the pioneering work of Barro (1991) and Mauro (1995) to include the most recent years for which data are available (for Bangladesh in the 1990s), the authors investigate the relationships between corruption, and growth, and, between corruption and investment, both domestic and...

The authors study the impact of corruption in a host country on foreign investors'preference for a joint venture, or a wholly owned subsidiary. Their simple model highlights a basic tradeoff in using local partners. On the one hand, corruption makes the local bureaucracy less transparent, and...

The author offers a possibly new interpretation of the connection between openness and good governance, with a conceptual model and some empirical evidence. Assuming that corruption and bad governance reduce international trade and investment more than domestic trade and investment, a"naturally...

The author presents measures with which to map institution building during the transition from centrally planned to market economies. Data collection and indicators are measured in terms of five institutional dimensions of governance: a) accountability; b) quality of the bureaucracy; c) rule of...

How does the lack of legitimacy of property rights affect the dynamics of the creation of the rule of law? The authors investigate the demand for the rule of law in post-communist economies after privatization under the assumption that theft is possible, that those who have"stolen"assets cannot...

The relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The theoretical literature makes ambiguous predictions about this relationship, and it has remained...

Ten years into the transition, corruption is so pervasive that it could jeopardize the best-intentioned reform efforts. The authors present an analytical framework for examining the role market institutions play in rent-seeking and illicit behavior. Using recently available data on the incidence...

Many societies have limited corruption through the broad-based mobilization of a diverse range of interests willing and able to defend themselves by making meaningful demands for accountability of, and limits on, official power, and for an end to illicit advantages enjoyed by others....

This paper provides an alternative way of testing the theory of legal origins, one based on a firm's perception of how helpful the government is for doing business. The author argues that an approach based on firm perceptions offers a number of advantages over existing studies. Specifically, the...

The author reviews the overwhelming statistical evidence that countries with high levels of corruption experience poor economic performance. Corruption hinders economic development by reducing domestic investment, discouraging foreign direct investment, encouraging overspending in government,...