Corruption and economic development: a systematic literature review of macroeconomic impacts, growth trajectories, and investment dynamics

The systematic literature review integrated three decades of empirical evidence, which demonstrated the link between economic development and corruption. The review examined how corruption affected GDP growth, foreign direct investment (FDI), income inequality, and economic efficiency across developed and developing economies. The analysis found that corruption disrupted economic development across all four sectors, but the degree and methods of impact varied across institutional settings. The "greasing the wheels" hypothesis received only limited, ephemeral support under highly specific conditions. Corruption imposed high costs: 0.5–1.5 percentage points reduction in annual GDP growth, 15–35% deterrence of FDI inflows, 0.5–0.8-point increase in Gini coefficients, and 10–20% losses in technical efficiency. The contingency framework established three distinct operational environments, which include developed economies with robust institutional systems, developing economies with insufficient institutional systems, and developing economies that are developing better institutional systems. The review concluded that anti-corruption programs function as essential economic policies that need ongoing development through tailored methods that address the specific needs of different contexts.