Files
Abstract
This paper seeks to examine the impact of corruption on economic growth in Lebanon. Using a
neoclassical model, we hypothesise that corruption reduces the country's standard of living as
measured by real per capita GDP. We show that corruption deters growth indirectly through reducing
the factor input productivity in a Cobb-Douglas production function. We provide empirical evidence
suggesting that corruption increases inefficiencies in government expenditure and reduces investment
and human capital productivity, leading to a negative impact on output. The implications of the
analysis are explored.