Endogenous corruption in a neoclassical growth model

The following paper presents a simple neoclassical growth model where corru ption is an endogenous result of competition between a public agent and a p rivate agent. The model provides a simple theoretical framework in which th e level of corruption as well as the effects of corruption on income, consu mption, and growth are identifiable. Bureaucratic red-tape is then added to the model. The results suggest that, a priori, corruption is neither effic iency enhancing nor efficiency detracting with respect to growth but always results in some income redistribution. (C) 2000 Elsevier Science B.V. All rights.