III. The Growth Process - 4

Yet, it is probably correct to say that
the process of economic growth ultimately
generates enough forces to reduce
corruption. Rewards to entrepreneurship
and productive investment
relative to rent-seeking investment rise
when there is sustained growth. A prospering
economy can also afford to pay
its civil servants well, reducing their
motivation for corruption. And to the
extent prosperity in the long run brings
more demand, at least on the part of

the middle classes, for democratic reforms,
the latter may install institutions
that check corruption. Not merely is the
coordination problem in bribe-collection
among legislators rendered more
difficult under democracy, as we have
discussed at the end of the preceding
section, but, more important, democratic
institutions build mechanisms of
accountability and transparency at different
levels which make it difficult for
the networks of corruption to be sustained
for long. A qualifier to this argument
relates, as we have noted before,
to campaign finance in democratic elections
which leads to influence peddling
on the part of politicians. Thus while
rich democracies have been quite successful
in better enforcement of laws,
they have been in some cases less successful
in reducing the influence of
money on the process of enactment of
those laws.