ABSTRACT
This chapter focuses on empirical grounds and shows how detrimental corruption is for socio-economic development. It explains that there are several ways in which development can be measured; corruption is harmful to development regardless of how it is measured. Poverty favors corruption because in very poor countries, there are fairly low rates of literacy and, the population does not have the means to be properly informed and to play an active role in monitoring and curbing corruption. The lack of institutionalization is strongly connected with corruption. The nature of the economy plays a key role in favoring corruption. Research studies have underlined the importance of two aspects in this regard: the role of the state in the economy, and the nature of economic competition in a country. The chapter presents costs of corruption and the dividends of good governance. Both correlation analyses and scatterplots made clear that good governance is associated with development and that corruption is associated with underdevelopment.
