Distribution and development in a model of misgovernance

Keith Blackburn, Gonzalo Forgues-Puccio

Research output: Contribution to journalArticle

26 Citations (Scopus)

Abstract

This paper presents an analysis of bureaucratic corruption, income inequality and economic development. The analysis is based on a dynamic general equilibrium model in which bureaucrats are appointed by the government to implement a redistributive programme of taxes and subsidies designed to benefit the poor. Corruption is reflected in bribery and tax evasion as bureaucrats conspire with the rich in providing false information to the government. In accordance with empirical evidence, the model predicts a positive relationship between corruption and inequality, and a negative relationship between corruption and development.
Original languageEnglish
Pages (from-to)1534-1563
Number of pages30
JournalEuropean Economic Review
Volume51
Issue number6
Early online date20 Dec 2006
DOIs
Publication statusPublished - Aug 2007

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