Date : 2017/03/29
Dr. Abulkasem Dowa1,a, Mr.Basem E. Ertimi 2,b
1University of Zawia, Faculty of Economics, Economic Department, Zawia City, Libya
2 University of Zawia, Faculty of Economics, Economic Department, Zawia City, Libya
Conference Location and Category: Atlantic City, New Jersey – USA – August 13 -14, 2015 / (Economics)
Theoretical debate on the effect of corruption on the economy remains undecided. The theoretical literature regarding the economic effect of corruption argue that corruption is an obstacle to the economy, while others consider that corruption can (in some circumstances) enhance the economy. Corruption has been acknowledged as an extra cost for doing businesses which, in turn, has a negative impact on economy as a whole. Many theories study the economic impacts of corruption. These theories stand for two major impacts of corruption on the economy. The first point of view sees that corruption can be good and enhancing the economy, while the second point of view sees that corruption is bad and hurting the economy. This paper is a review at these positions by studying the theoretical literature on the effects of corruption on an economy. It is concluded that corruption has parallel the effect on economy positively and negatively, however, recent studies show that negative impact of corruption is the norm but the positive impact is the exception.
Keywords: Corruption, Bureaucrats, Bribery, Economic Growth, Equilibrium, Demand and Supply, Rent Seeking, Monopoly.