Are Corruption and Taxation Really Harmful to Growth? Firm Level Evidence

The debate on the effect of corruption on economic growth has been a hotly contested issue for several decades. Often, the effect of corruption is thought of as being something like a tax, differing primarily in that the payment does not end up as public revenues.1 To the extent that this deprives the government of revenue required to provide productive public goods, corruption may be more detrimental to growth than taxation.

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