Corruption in a neoclassical growth model with a non-convex production function

In this article, we analyze the bureaucrats’ corruption problem in a simple neoclassical growth model with a non-convex production function. In this model, we consider direct relations between product (income) taxation and corruption, and between corruption and public goods provision. As the main result, we show that the optimal consumption growth path in this economy is higher in a non-corrupt environment than in a corrupt environment and the higher the proportion of corrupt bureaucrats, the higher the cost of corruption to society.