Corruption and Economic Growth: How does Piety Matter?
This study integrated the religious dimension into the economic analysis of corruption and growth. The idea along
which, religion matters in explaining the extent of corruption -in addition to the conventional factors (institutional and economic
ones)- was defend. Parting from the fact that Qur’an and Prophetic Narrations forbid corruption, the more pious is a
Muslim, the lower should be his incentives for corruption. Hence, a higher level of piety in a society should translate into
higher economic outcomes. The tractable analytical model developed in this study showed two possible channels for corruption
to damage the long-run rate of economic growth. It also showed that, there is a minimum level of piety required for an
economy to be productive. Below this threshold, the economy moves away towards an illegal rent-seeking situation. In addition,
better quality of institutions and a reduced income tax contribute in lowering the threshold of piety required for an
economy to move away from rent-seeking activity and towards productive activity.
Keywords- Piety, Islamic References, Corruption, Public investments, Economic growth JEL Classification: E62, O43, P47