Enrichment with Growth

This essay first sets out the
"business model" problems entailed by corruption
and their effects as well as implications for economic
growth. Key issues are the need for secrecy and co-operation
with partners in crime. Dealing with these leads to behavior
which is ostensibly bizarre and undermines economic
efficiency, but is in fact a rational way of managing
corrupt practices. However, different economic policies can
be pursued that are compatible with corruption. Some are
more pro-growth than others. Pro-growth corrupt policies
hold the promise of enriching the corrupt elite more in
absolute terms even though the share of national wealth
diverted may be smaller. The most effective pro-growth
polices that help enrich an elite resemble fairly orthodox
economic policy prescriptions. Eventually the abolition of
corruption holds the greatest promise to enhance growth and
with it the wealth of elites. The expectation of such growth
may explain why more and more political elites pursue
"sound" economic policy and may embrace
anti-corruption efforts, while securing legal ways of
enrichment for themselves. Country examples illustrate
policy approaches with different combinations of enrichment
and growth properties.