Corruption and Technological Progress: A Takeoff Theory of Good Governance

Corruption is known to be a function of its return relative to productive activity. But the idea that corruption might itself respond to technological progress has not been emphasized. This paper presents an approach for thinking about institutional features that lower corruption by lowering its relative return. Policies that promote productivity growth in market exchange may cause the relative reward to rent-seeking to decline. The evolutionary development of anti-corruption efforts may be a normal part of modernization, much as changes in income distribution and urbanization.