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This study explores the relationship between transparent public finances and economic growth, highlighting how corruption and income distribution affect public finances, investments, and human capital formation. The study also investigates the East Asian Paradox and the causation between low income, weak institutions, and corruption.
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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
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 • smaller per capita income corruption
The East Asian Paradox 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 corruption weak institutions weak growth weak property rights