The Economic Cost of Corruption: A Survey and New Evidence

A. Dreher, T. Herzfeld

Research output: Chapter in Book/Report/Conference proceedingConference paperAcademic


This paper reviews the empirical literature on the economic costs of corruption. Corruption affects economic growth, the level of GDP per capita, investment activity, international trade and price stability negatively. Additionally, it biases the composition of government expenditures. The second part of the paper estimates the effect of corruption on economic growth and GDP per capita as well as on six possible transmission channels. The results of this analysis allows to calculate the total effect of corruption: An increase of corruption by about one index point reduces GDP growth by 0.13 percentage points and GDP per capita by 425 US$.
Original languageEnglish
Title of host publicationAnnals of the IVth Global Forum on Fighting Corruption, Brasillia, Brazil, 7 - 10 June, 2005
Publication statusPublished - 2008
EventIVth Global Forum on Fighting Corruption -
Duration: 7 Jun 200510 Jun 2005


ConferenceIVth Global Forum on Fighting Corruption


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