Corruption and Entrepreneurship in Brazil

Entrepreneurship is essential for economic growth. Psychological, social, and economic factors contribute to entrepreneurship. Some of these factors are susceptible to corruption. Bureaucratic economic corruption—the use of one’s influence as a public servant for economic gain—changes the incentives to engage in entrepreneurship and requires entrepreneurs to use some of their resources in non-productive activities. This paper examines the role of corruption in entrepreneurship in Brazil. The persistent corruption in many areas of government, including the judiciary, taxes, and procurement, distorts the incentives to entrepreneurship and to other types of investment, such as investment in human capital. I