ABSTRACT
Economic development depends upon both good policies and effective institutions to carry out those policies. A country that tries to follow the prescriptions of macroeconomists will not succeed in promoting growth if its public and private institutions are very corrupt and dysfunctional. True, some countries are able to grow in spite of pervasive corruption, but extremely corrupt countries are not in that group and even corrupt countries that manage to grow would do better with more effective institutions that need not be circumvented with bribes.
