A Study On The Relationship Between Corruption And Economic Growth

Corruption has become the focus of China's economic and social transformation.This paper begins with the connotation and extension of corruption,and combs the previous theory of the relationship between corruption and economic growth,and discussed the relevant Chinese and foreign anti-corruption ideas.Then,this paper constructs the game theory model of corruption,it is found that corruption is only a zero-sum game and the market can't achieve to the optimal state under the assumption that the relevant costs are not taken into account.Corruption not only distorts the allocation of resources under the assumption that the relevant costs are taken into account,but also has a negative cost to society.Therefore,this paper draws the conclusion that corruption hinders economic growth and distorts the allocation of resources from the theoretical model.In order to test the above hypothesis and to further study the ways of which corruption affects economic growth,this paper uses corruption cases published by China's Procuratorial Yearbook to measure the provincial corruption,and uses the DEA-Malmquist method to decompose the growth of real GDP into three parts:technical efficiency improvement,technical progress and input accumulation.And then this paper uses the provincial panel data from 2002 to 2015,adopts the fixed effect model method to study the effect of corruption on the real GDP growth and its decomposed components.The empirical results show that corruption does hinder economic growth in China.The decomposition of economic growth finds that corruption mainly by inhibiting the accumulation of investment and technological progress to hinder economic growth,corruption has no significant impact on technological efficiency.