Corruption and total factor productivity : level or growth effects?

This paper adopts a productivity-based perspective in order to study how corruption conditions the efficiency levels of the economies and their TFP growth rate. It attempts to identify the channels through which corruption can influence productivity growth, whether by conditioning improvements in relative efficiency levels or by shifting the production frontier. The results point out that corruption negatively affects both the levels of efficiency at which the economies perform and the growth rate of TFP, suggesting that the negative impact of corruption on technological progress manifest through its influence on human capital.