Corruption in public finances, and the effects on inflation, taxation, and growth

In this paper, we study the effects of bureaucratic corruption on inflation, taxation, and growth. Here corruption takes three forms: (i) it reduces the tax revenues that are raised from households, (ii) it inflates the volume of government spending, and (iii) it reduces the productivity of ‘effective’ government expenditure. Our policy experiments reveal that the effect of (i) is to increase both seigniorage and the income tax rate, and to decrease the steady-state growth rate. The effect of (ii) is to increase seigniorage, which leads to lower growth, although the effect on the income tax rate is ambiguous. The effect of (iii) is to increase seigniorage and decrease the income tax rate. The former yields a lower growth rate, while the latter has an ambiguous effect on growth. These findings, from our unified framework involving corruption in public finances, could rationalise the apparently conflicting evidence on the impact of corruption on economic growth provided in the literature, highlighting the presence of conditional corruption effects

Aid, Budgetary Policies, and the Macroeconomy: Growth, Inflation, and Welfare

This paper examines the macroeconomic effects of foreign aid transfers in a small open recipient economy. The focus, however, is not on the impact of foreign aid per se but rather on aid’s influence conditional upon the different budgetary financing policies under the discretion of the recipient government. We compare the effects of an aid transfer tied to investment in a public good from a pure aid transfer, under income-tax and/or inflation-tax financing of government expenditures. The effects of each form of aid under each type of public financing are examined with respect to the economic growth rate, the rate of inflation, and the percentage change in welfare of the recipient economy. The economy is analyzed numerically and specific policy recommendations are provided for individual recipient countries.

The Impact of Foreign Aid on Economic Growth: Volatility of Disbursements and Distribution of Receipts

This paper is concerned with the effects of aid transfers and their degree of volatility on economic growth. We develop a theoretical framework that distinguishes the allocation of foreign aid between productive and nonproductive uses. On the one hand, devoting aid inflows into productive public spending promotes growth while the related volatility has a damaging effect. On the other hand, the non-productive use of aid transfers has an adverse effect on growth while their volatility is growth-enhancing. The theoretical implications are supported by an empirical specification, formulated on similar grounds, for a panel of 74 aid-recipient countries over the time period from 1972 to 1998. The empirical results are found to be robust in a variety of sensitivity tests.

Corruption Clubs: The Allocation of Public Expenditure and Economic Growth

This paper studies the optimal allocation of government spending between health, education, and infrastructure in an endogenous growth framework. In the model, infrastructure a?ects not only the production of goods but also the supply of health and education services. The production of health (education) services depends also on the stock of educated labor (health spending). Transitional dynamics associated with budget-neutral shifts in the composition of expenditure are analyzed, and growth- and welfare-maximizing allocation rules are derived and compared. The discussion highlights the key role played by the parameters that characterize the health and education technologies.

The amount of phosphorus in the blood of heroin abusers compared to that of healthy subjects

Background: The aim of the current retrospective study was to assess any difference in terms of serum phosphate (P) between heroin addicts and healthy subjects. Methods: Between 2011 and 2012, under the authority of the Greek Organization Against Drugs (OKANA), 30 regular heroin addicts, 22 males and 8 females (Group A) participated at the study. Between 2010 and 2011, 30 healthy individuals, 22 males and 8 females (Group B), presented on an outpatient basis for either fatigue or common flu symptoms without fever at the 424 Military Hospital of Thessaloniki. Results: No significant difference between group A and B, in terms of either age (p = 0.454, Mann-Whitney test) or male/female ratio (p = 0.573, Chi2 test), suggesting a homogeneity for the population of individuals participating in the study. The mean values of serum-P in group A and B were 3.47 ± 0.65 and 3.35 ± 0.58, respectively (p = 0.45, Mann Whitney test). Conclusions: The absence of statistical difference of serum-P between heroin addicts and healthy subjects as shown in our results should be confirmed in further studies