Modelling the dynamics of corruption and unemployment with heterogeneous labour

Lim, K.Y. ORCID: 0000-0003-1978-176X, 2019. Modelling the dynamics of corruption and unemployment with heterogeneous labour. Economic Modelling, 79, pp. 98-117. ISSN 0264-9993

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This paper presents an endogenous growth model with heterogeneous labour, endogenous unemployment, and public sector corruption. Unlike most previous studies, the model does not separate public officials and private individuals into two distinct groups. Instead, taking up bureaucratic appointment as a public servant is modelled as an occupational choice, which then allows for the endogenous determination of the proportion of public officials, the share of corrupt officials among them, and the public investment efficiency of the economy. The dynamics of endogenous corruption and unemployment are studied using numerical policy experiments based on a stylized representation of a middle-income African economy with high corruption and unemployment. The main finding is that, large-scale public infrastructure push has no effect on raising growth in an economy with high corruption. However, if preceded by social and anti-corruption policies that successfully induce a structural change, it will then be effective in raising growth.

Item Type: Journal article
Publication Title: Economic Modelling
Creators: Lim, K.Y.
Publisher: Elsevier
Date: June 2019
Volume: 79
ISSN: 0264-9993
S0264999318309738Publisher Item Identifier
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 05 Nov 2018 16:12
Last Modified: 21 Apr 2020 13:28

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