Virtuous cycles: or Growth is good

Nice new NBER working paper, “Does Economic Growth Reduce Corruption? Theory & Evidence from Vietnam”

(Ungated version here).

The paper studies corruption across industries and provinces, finding that higher industry growth rates do reduce bribe payments, especially in industries that are mobile.

As the authors put it, “Our results suggest that as poor countries grow, corruption could subside “on its own,” and they demonstrate one type of positive feedback between economic growth and good institutions.”