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arXiv · 2507.13099

Governance, productivity and economic development

Cuong Le Van·Ngoc-Sang Pham·Thi Kim Cuong Pham·Binh Tran-Nam
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Abstract

This paper explores the interplay between transfer policies, R\&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal revenues, and undertakes public investment (in R\&D, infrastructure, etc.). Corruption is modeled as a fraction of tax revenues that is siphoned off and removed from the economy. We first establish the existence of a political-economic equilibrium. Then, using an analytically tractable framework with two private agents, we examine the effects of corruption and evaluate the impact of various policies, including redistribution and innovation-led strategies.

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Cuong Le Van, Ngoc-Sang Pham, Thi Kim Cuong Pham, Binh Tran-Nam. 2025-07-17. Governance, productivity and economic development. https://arxiv.org/abs/2507.13099

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