Hidden Bibliographic Details
| Other authors / contributors: | Davoodi, Hamid Reza, author.
Alonso Terme, Rosa Maria, 1965- author.
International Monetary Fund, issuing body.
International Monetary Fund. Fiscal Affairs Department.
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| ISBN: | 1451896123
9781451896121
1281601756
9781281601759
1462313663
9781462313662
145277952X
9781452779522
9786613782441
6613782440
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| ISSN: | 2227-8885
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| Notes: | Includes bibliographical references (pages 37-41).
Restrictions unspecified
Electronic reproduction. [S.l.] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
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| Summary: | Government officials may use their authority for private gain in designing and implementing public policies. This phenomenon-defined broadly as corruption (Tanzi, 1997a)-may result in enriching these officials as well as private individuals who obtain a larger share of public benefits or bear a lower share of public costs. In this way, corruption distorts the government's role in resource allocation. It has been argued (Tanzi, 1995) that the benefits from corruption are likely to accrue to the better-connected individuals in society, who belong mostly to high-income groups. Thus, corruption would affect not only broad macroeconomic variables, such as investment and growth, but also income distribution. It has been further contended that corruption increases poverty by creating incentives for higher investment in capital-intensive projects and lower investment in labor-intensive projects (United Nations Development Programme, 1997). Such a bias in investment strategy deprives the poor of income-generating opportunities. This paper demonstrates that high and rising corruption increases income inequality and poverty by reducing economic growth, the progressivity of the tax system, the level and effectiveness of social spending, and the formation of human capital, and by perpetuating an unequal distribution of asset ownership and unequal access to education. These findings hold for countries with different growth experiences, at different stages of development, and using various indices of corruption. An important implication of these results is that policies that reduce corruption will also lower income inequality and poverty.
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| Other form: | Print version: Gupta, Sanjeev. Does corruption affect income inequality and poverty? [Washington, D.C.] : International Monetary Fund, Fiscal Affairs Dept., ©1998
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| Standard no.: | 10.5089/9781451896121.001
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