Corruption is considered a vice everywhere. In economic research, the matter is more divided than one would like. Some studies find it slows growth, some find it can “grease the wheels,” and others find the effect changes with circumstances.
This paper asks a simpler question: is the damage the same everywhere, or does it depend on the kind of country you’re looking at? Using data on 152 countries from 2012 to 2021, the paper looks at how perceived corruption (measured by Transparency International’s Corruption Perceptions Index) relates to GDP per capita, while controlling for consumption, trade openness, interest rates and political stability.
Countries are compared in two ways: developed versus developing, and by legal origin, meaning whether a country’s legal system descends from British common law or from French, German or Scandinavian civil law.
The findings are fairly clear. Corruption hurts growth overall, and the harm is roughly twice as large in developing economies as in developed ones. Legal origin also matters. Corruption has a significant negative effect in French and German civil law countries, but no measurable effect is observed in British common law and Scandinavian countries.
The paper is among the first to bring legal origins into the corruption-growth question. Its practical point is that anti-corruption policy that works in one setting may not carry over to another, so reforms should fit a country’s institutional and legal context.
Paper published in Forman Journal of Economic Studies, Vol. 21(1), 2025, pp. 97–124: https://doi.org/10.32368/FJES.20252105.
