Shaomin Li

Although most people know that corruption is bad for an economy, a puzzle remains: why does corruption seem to hurt some countries less than others? Or, looking at corruption from an even more positive perspective, why are some countries able to achieve rapid economic growth under rampant corruption? I offer an explanation for this puzzle from the perspective of an informal governance mechanism and the role of trust in the corruption-efficiency relationship. Using the cases of China and the Philippines and multi-country statistical data, I show that, ironically, corruption and trust, two morally opposite behaviors, have become bedfellows in driving economic growth in relation-based societies. This talk is based on my recent book, Bribery and Corruption in Weak Institutional Environments: Connecting the Dots from a Comparative Perspective (Cambridge University Press, 2019).